Financial Times Op-Ed: The Fed should not move too quickly to raise rate

 In the ten years following the global financial crisis, the US labour market has largely recovered, with the unemployment rate falling from a peak of 10 per cent in 2009 to 3.9 per cent today, an 18-year low. US firms widely report difficulty finding qualified workers to fill job openings. As in other advanced economies, the US recovery took place after the Federal Reserve undertook extraordinary monetary policies, including keeping interest rates unusually low and quantitative easing bond-buying programmes. Read More @ https://www.minneapolisfed.org/news-and-events/messages/financial-times-op-ed

Goldman Sachs: The fiscal outlook for the US ‘is not good’

  • Jan Hatzius, chief economist at Goldman Sachs, sees the deficit ballooning to $2.05 trillion (7 percent of GDP) by 2028.
  • “Lawmakers might hesitate to approve fiscal stimulus in the next downturn in light of the already substantial budget deficit,” the economist said.
  • The Congressional Budget Office projects that debt could equal GDP within a decade, a level not seen since World War II. – Read More @ https://www.cnbc.com/2018/05/21/goldman-sachs-the-fiscal-outlook-for-the-us-is-not-good.html

Another Challenge Ahead and is good for USD – “God Help Turkey”: FX Confiscation Rumors Launch Lira Meltdown As Yields Explode

While Turkey may have repatriated all of its gold held at the NY Fed, or at least moved it from New York to the BIS tower in Basel as we reported overnight, what markets are far more concerned about is the ongoing inactivity by the central bank to arrest the record collapse in the Turkish Lira and the just as record surge in Turkish 10Y yields, which in light of Erdogan’s threats on the “independent” central bank, which is now terrified to hike rates, is perhaps understandable. It is therefore also understandable why, as Bloomberg reports this morning, one brokerage is looking for help from a higher power: “God help Turkey” Istanbul-based broker Alnus Yatirim said in the sign-off to its morning note to clients on Monday. “We’re faced with a central bank that is watching the market when it needs to lead and direct it.” Read More @ https://www.zerohedge.com/news/2018-05-21/god-help-turkey-fx-confiscation-rumors-launch-lira-meltdown-yields-explode

WHAT IS THE USD INDEX SAYING?

USD is at strong Support @ 93.50 – the market is consolidating and looking for new data and news to push the USD to new highs; TURKEY Lira crash and Iran Sanction could be the wild card for USD to rally one more time this week. FED trying to play down the USD by often talking about the rate hike and it seem that is not working. USD is heading north today. Be cautious and always have good money management in place.

TODAY’S NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES.

  1. 1.00pm – Japan will release their CORE CPI; expect to be no change or weaker. JPY weakness expected to continue today.
  2. 4.15pm – 5.00pm – UK will release their inflation report – GBP volatility is expected we stay neutral for now as the market already priced in the price movement.
  3. Tentative – German will release their German Buba report and is expected to be good. EUR is expected to move up today.
  4. 10.00pm – US will release their Richmond manufacturing Index and is expected to be good.

Is a tough market ahead as the Fundamentals are all confusing and technical point of view is at extreme highs and lows; we stay low volume trading till June 14th for the FOMC to be completed. Always bear in mind your money management rules (10/2).

High Risk Investment Warning:

Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary.

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