According to the New York Federal Reserve, one-year inflation expectations rose to 3.0% in the latest survey from 2.8% previously and the highest reading since the middle of 2015.
Inflation expectations will be an important element of Fed thinking over the next few months, especially as the FOMC had worried previously that low expectations would prevent a rise in the inflation rate.
Dallas Fed President Kaplan stated that the Fed should raise interest rates again sooner rather than later with rates increasing in a gradual and patient manner.
The dollar’s trade-weighted index hit the highest level for over three weeks and the Euro dipped to test support below the 1.0600 level as strong risk appetite curbed Euro support.
Commentary from Fed Chair Yellen will be watched very closely on Tuesday with markets currently putting the chances of a March interest rate increase at around 22%.
Any hints of a March hike would provide further net dollar support as the Euro edged back above 1.0600 on a wider US retracement.
Japanese Yen With JPY at a new 34 year low versus EUR, the market is set for an ambush by the Bank of Japan if it acts today at the end of their Policy Meeting to support the Yen. The reason that the market is susceptible is because it has convinced itself that the BoJ […]
Too soon to call USD lower Those following the US Dollar’s performance in the markets would have noted a recent downturn accelerating as this week has progressed. There have been two factors driving this sell-off but it is far from certain that either may endure long enough to push the Dollar index back to its […]
Milan, Italy The City of Milan has a late night noise problem and so it has acted unilaterally to resolve it-Italian style. A ban on the sale of take away food including ice cream and pizza after midnight is being imposed to protect the “peace and health of residents.” Here in the UK late night […]