Slow on Rate Cuts, No Hikes

US Fed member Waller spoke about the Fed’s thinking a few hours ago, reiterating the usual message of recent months – the Fed won’t rush into any rate cuts and current conditions do not support cuts, but he also suggested that the prospect of any rate hike is very remote.

  1. FOMC member Waller spoke a few hours ago about the Fed’s monetary policy. He basically gave the same message the Fed has been putting out for some months now. Summary: there will be no rush to cut rates, a rate hike is very unlikely, and the current state of the economy does not warrant a major rate cut.
  2. The Japanese Yen remains weak, but the USD/JPY currency pair has not retested the record high it made very recently just below ¥152. Japanese financial officials will likely threaten intervention if ¥152 is tested again, but it seems likely that the price won’t fall very far, giving traders potential opportunities to trade that range. Trend traders will still be interested on being long of the USD/JPY and in being short of the Japanese Yen in general.
  3. The minor commodity Cocoa continues rise, again closing at a new all-time high.. The commodity superfood has almost tripled in value over the last year alone, with many analysts suggesting supply side shortages are at least partly to blame for the meteoric rise. There is more and more demand for Cocoa every year as it is coveted as a key ingredient for chocolate but also as a superfood in its own right. Trend traders will be interested on the long side, although which such high volatility and sharp gains, it could come crashing down at any time, so trend traders must be careful to use a disciplined stop loss if going long. As well as Cocoa futures, there are Cocoa ETNs available which may be more suitable for retail traders and investors.
  4. Bitcoin is rising again and trading above $70,000 not far from its recent record high near $74,000, despite crypto funds seeing record outflows last week.
  5. Gold is continuing to look bullish and may well test its recent record high over the coming days, although it is still some way off. Trend traders will also be interested in the long side here. Yesterday spot Gold made its highest ever daily close near $2,200 which is not from its record high price made a few days ago.
  6. There will be a few high-impact data releases later today:
  • Canadian GDP, which is expected to show a month-on-month increase of 0.4% after remaining unchanged over the previous month.
  • US Final GDP, which is expected to remain unchanged at an annualized rate of 3.2%.
  • US Pending Home Sales
  • Revised UoM Consumer Sentiment

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