Fed Officials Signal June Hike and Caution on Inflation Progress
Federal Reserve officials signaled they are set to raise interest rates at their meeting in June, but sent no clear message on whether they’d hike one or two more times this year following that move. U.S. central bankers said “it would likely soon be appropriate” to increase the benchmark policy rate, according to a record of their May 1-2 meeting released Wednesday, confirming investor expectations for a move next month. Beyond that, officials “expressed a range of views on the amount of further policy firming that would likely be required.” “It seems like they couldn’t agree on anything beyond the next meeting,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York. “They’re really, truly going to be taking this one meeting at a time.” Read More @ https://www.bloomberg.com//news/articles/2018-05-23/fed-officials-signal-june-hike-and-caution-on-inflation-progress
Fed indicates it will let inflation run above 2 percent goal for ‘temporary period’
- The Federal Reserve minutes from its May meeting said “a temporary period of inflation modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective.”
- The central bank also pointed to an interest rate hike at the June meeting.
- “It would likely soon be appropriate for the Committee to take another step in removing policy accommodation,” the minutes said. Read More @ https://www.cnbc.com/2018/05/23/fed-indicates-it-will-let-inflation-run-above-2-percent-goal-for-temporary-period.html
ECB pre-preview: New complications on the road to taper
Even though we still have three more weeks to go before the next ECB meeting, recent developments clearly signal doing nothing and buying time in June is the best and most risk-free option – Read More @ https://think.ing.com/articles/ecb-pre-preview-june-meeting-new-complications-for-mario-draghi-on-the-road-to-tapering/
Trump administration weighs new tariffs on imported vehicles: WSJ
The administration is considering starting a probe of imported cars under a legal provision known as Section 232, possibly applying tariffs at the end, the Journal reported, citing industry officials briefed on broad outlines of the plan. The Trump administration is currently considering tariffs of up to 25 percent, the Journal said. The plan remains in its early stages, and is likely to face significant opposition from a number of interest groups, from foreign trading partners to domestic dealers of imported cars, the newspaper added. Trump has already imposed hefty import tariffs on steel and aluminum under Section 232 of the 1962 U.S. Trade Expansion Act, which allows safeguards based on “national security.” Read More @ https://www.reuters.com/article/us-usa-trade-autos/trump-administration-weighs-new-tariffs-on-imported-vehicles-wsj-idUSKCN1IO393?il=0
WHAT IS THE USD INDEX?
USD will price in till June 14th as the FED sets to raise rates; $95 focus now. Bullish Flag confirms the first move and now the Price will consolidate at $94 BEFORE the next move; all other major pairs should have a pullback this week before the next fall.
TODAY’S NEWS THAT MIGHT AFFECT THE TECHNICAL TRADES
- 2.00pm – German will release their final GDP and is expected to have no change; short term the EUR still has a downward movement but long term still a buy when the tapering starts.
- 4.00pm – ECB will release Financial Stability and this report will create a good volatility for EURO; we are expecting neutral or same report as previous – dovish.
- 4.00pm – BOE will also come on the spotlight when Mark Carney speaks – expect volatility for the GBP Pairs. Mark Carney will remain cautious after recent weak inflation report.
- 4.30pm – UK will release their retail sales and is expected to be better then previous – little or no movement.
- 7.30pm – ECB will release their Policy meeting Accounts – It’s a detailed record of the ECB Governing Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates – we are expecting dovish statement after recent weak data from EURO.
- 10.00pm – Existing Homes sales US – we are expecting better then previous month. We buy USD.
The market will continue pricing in USD upwards till June 14th; be cautious and always put money management as your number priority.
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