The US data remained robust with initial jobless claims increasing only slightly to 239,000 in the latest week from 234,000 previously which still indicated a strong labour market with layoffs remaining at low levels. There was a small decline in housing starts to an annual rate of 1.25mn from 1.28mn previously while permits rose to 1.29mn from 1.23mn.
There was also a strong reading for the February Philadelphia Fed manufacturing survey which increased to 43.3 from 23.6 and the highest reading for over 30 years, although the prices indices declined slightly on the month.
Fed Vice Chair Fischer backed Yellen’s stance on policy with expectations of further increase in rates and markets will continue to monitor comments in order to assess the potential for a rate hike at the March meeting. The dollar pushed higher immediately after the data, but was again unable to gain any traction and the Euro resisted any significant selling. Overall, the Euro rallied to the 1.0680 area as the dollar’s trade-weighted index declined by around 0.60%.
Calling the bluff As expected, the Federal Reserve raised interest rates in the United States yesterday evening by a further 50 basis points. As a result of this policy adjustment, immediate target policy levels now stand at 4.25-4.5%. As also expected, the Fed pushed back fairly hard on the idea that it is ready to […]
Pencil to pen As with any year ahead, 2023 has been fervently speculated over by market participants. Whilst forecasts for the forthcoming year take great priority every year, 2023 has perhaps the most divergent set of forecasts between analysts and institutions on recent record. Across asset classes and between institutions the core themes expected to […]
False Illusions On Friday last week markets had got very exuberant over comments made by the Federal Reserve Chair the day prior. As a result of the interpretation of those comments, the US Dollar had dropped several cents to trade at its recent lows. There was a narrative that was being pieced together and justified […]