Renewed Hawkish Fed Speak

CURRENCY FUTURES

The U.S. dollar index is higher and is at the highest level since early July in light of renewed hawkish Fed speak.

fed reserve

Germany’s wholesale prices dropped 2.8% from a year earlier in July of 2023, marking the fourth consecutive month of decline, after a 2.9% drop in the previous month.

The Japanese yen declined against the U.S. dollar to its lowest level since November last year.

The Japanese yen breached the key 145 level earlier today, as traders looked for clues on possible intervention from the Bank of Japan.

The Reserve Bank of Australia’s monetary policy meeting minutes will be released tomorrow.

STOCK INDEX FUTURES

Stock index futures are lower.

The newest fundamental in recent days is some Federal Reserve officials are once again talking about the need for an additional fed funds rate hike.

There are no major economic reports scheduled for today.

Traders are awaiting Wednesday’s release of the minutes from the Federal Reserve’s last policy meeting, in which the central bank resumed its rate-hiking campaign.

INTEREST RATE MARKET FUTURES

Futures are mostly lower with Treasury yields continuing to trend higher.

Despite the recent more hawkish Federal Reserve, most market participants see the Federal Reserve leaving its fed funds rate unchanged when it meets next month.

Financial futures markets are predicting there is an 88% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 12% probability of a 25 basis point increase.

 

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