Goldman: Something strange is happening with the US economy that could cause interest rates to jump
- The U.S. budget deficit is growing at a time when the unemployment rate is falling, something that hasn’t happened in peacetime since World War II.
- Goldman Sachs projects that rising costs to fund the deficit will force the government to borrow more which will push up interest rates.
- In all, the benchmark 10-year Treasury note yield likely will rise from nearly 3 percent now to 3.6 percent by the end of 2019, Goldman projects. Read more @ https://www.cnbc.com/2018/05/14/goldman-deficit-unemployment-rate-disconnect-could-fuel-higher-interest-rates.html
Rising oil prices boost U.S. economy: Kemp – US Economy is getting better each month. Easy monetary policy is one of the reason.
U.S. net petroleum imports have fallen to the lowest level in more than half a century as a result of the shale revolution, which is profoundly changing the impact higher oil prices have on the economy.
Since the 1860s, the United States has been the world’s largest producer and consumer of oil, which means it has a complicated relationship with oil prices.
Rising oil prices benefit some businesses and workers at the expense of others, and the same has been true about a sharp price fall. Read More @ https://www.reuters.com/article/oil-prices-kemp-idAFL5N1SM6YS
Fed’s Williams Sees Three to Four 2018 Hikes Still Warranted
Federal Reserve Bank of San Francisco President John Williams said he’s “very positive” about the economic outlook both in the U.S. and abroad and reiterated that he views three to four interest-rate increases this year as appropriate. Williams, who will take the helm of the New York Fed on June 18, said Tuesday inflation is nearing the central bank’s 2 percent target after a temporary slowdown last year and noted that unemployment is at its lowest since 2000, shoring up his confidence in the outlook. Read More @ https://www.bloomberg.com//news/articles/2018-05-15/fed-s-williams-says-three-to-four-hikes-still-warranted-in-2018
WHAT IS THE USD INDEX SAYING?
USD support @ 92.50 IS FIRMED and confirmed – with at least 3-4 rate rise this year – USD is in preparation for new highs. $94 IS NEXT this week. Be cautious if you are shorting USD.
TODAY’S NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES.
- 7.50am – Japan will release GDP data – expected to be good. We maintain SELL for USDJPY.
- 8.30am – Westvaco Australia will release Consumer sentiment – AUD volatility expected.
- 9.30am – Australia will release Wage price – which is a leading indicator and is expected to have no change – more downside awaits for AUD Pairs.
- 2.00pm – German will release its CPI and is expected to be weak – more downside awaits for EURO.
- 5.00pm – Euro will release final CPI and expected to be no improvement.
- 8.00pm – Mario Draghi will speak and he will will continue to downplay EUR. Expect Dovish statement.
- 8.30pm – US will release building Permits – expected to be good.
- 10.30pm – The night will end with Oil Inventories – expected to be in favor for the OIL.
Overall the market is pricing in for FED Rate hike June 14th 2018. USD is well support and the USD Yields are jumping each day – demand is increasing. Be cautious if you are shorting the USD and always maintain good money management at all times.
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