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Market Update – November 3 – FED – Slower Hikes but for Longer

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Market Update – November 3 – FED – Slower Hikes but for Longer


  • The FOMC rose rates by the as expected 75bp (4th consecutive hike to 14-year highs) and suggested lower rate hikes – “time to reassess pace of rate hikes is coming” – (50bp Dec. 25bp In Q123), but possibly for longer. “very premature to think about pausing.” We also suggest a higher Terminal rate5.1%Powell then re-iterated that “we have some ways to go until inflation is defeated.” Stocks and USD traded wild on two-edged communication.  This week, the jobs market is HOT. JOLTS were better & ADP At 239K was 23% over expectations – so today’s Claim and tomorrow’s NFP It is crucial.
  • USDIndex – DI ived to 110.25 Trades are not included in the initial headline 1.8% Higher now  112.23. US Stocks The rally was reversible, but the stock market then plummeted lower to close.NASDAQ -3.36% underperformed again). 10-yr yields flirted under 4.0% Hold on! 4.06%The 2-10yr yield curve continues to be the most inverted (and thus most recessionary) in 22 years.  Asian The markets are less stable and more volatile EUR Futures are flat.
  • Overnight – AUD Services PMI Better than expected49.3) & Chinese Service PMIs It’s worse than we expected48.4) Both remain in contraction.   
  • EUR – from a spike to 0.9980 It has fallen to 0.9780 now.   
  • JPY – dipped to 145.80 but now trades at Continue reading…