Fed Chair Powell stresses caution on rate cuts amidst positive inflation signals ========== Fed Chair Powell signaled that the Fed wants additional confirmation that the economy is on a path to bring inflation back to 2% in a sustainable way. The labor market is an important variable. The US economy added 353k jobs in January, with an upward revision for the previous two months. Despite recent wage growth, it may not be in line with sustainable inflation. US yields and German yields increased. Markets now see only about a 20% chance of a March rate cut. The dollar outperformed. Fed Chair Powell suggested that it might take until summer for the Fed to start its easing cycle. The US 2y yield increased. The Turkish central bank fired its chair and replaced her with the deputy governor. The Turkish lira holds close to all-time low levels. Slovak Finance Minister Kamenicky said that the government wants to show investors that they have a clear consolidation trajectory and that its plan to reduce the budget deficit is credible. Hungary's economy minister forecasted a higher budget deficit target for this year. Gold price remains under selling pressure. The ISM Services PMI for January is the main macro driver in focus for the US. The RBA's rate decision takes to the front on Tuesday. #FederalReserve #InterestRates #Inflation #LaborMarket #UsEconomy #Wages #Yields #Dollar #TurkishCentralBank #BudgetDeficit #GoldPrice #IsmServicesPmi #RbaRateDecision https://www.fxstreet.com/analysis/fed-chair-powell-stresses-caution-on-rate-cuts-amidst-positive-inflation-signals-202402050747

UK unemployment rate lower after new ONS data ========== The UK unemployment rate fell to 3.9% from 4.2% in the three months to November, according to new data from the Office for National Statistics (ONS). However, the economic inactivity rate was higher than previous estimates and average hours worked were revised down. The revised survey suggests that wage pressure could remain elevated, supporting the Bank of England's caution on cutting rates. The ONS will conduct face-to-face interviews to improve the quality of UK labour market data. Vodafone beat analyst estimates for organic revenue last quarter, while Fed Chair Jay Powell reiterated the forecast of three rate cuts for 2024. Chinese stocks have slumped, raising concerns about margin calls and potential political unrest. #Uk #UnemploymentRate #Ons #LabourMarket #WagePressure #BankOfEngland #Vodafone #FedChairJayPowell #RateCuts #ChineseStocks https://www.fxstreet.com/analysis/uk-unemployment-rate-lower-after-new-ons-data-202402050754

AUD/USD Outlook: Bears have the upper hand near YTD low ahead of RBA on Tuesday ========== The AUD/USD pair stages a modest recovery from the 0.6485 area, or its lowest level since November 17 touched this Monday and trades with a mild positive bias during the early European session. The USD struggles to capitalize on its modest intraday uptick to a nearly two-month peak and fails ahead of the 100-day Simple Moving Average (SMA), which, in turn, is seen as a key factor lending support to spot prices. Investors further scaled back their expectations regarding the timing and pace of rate cuts by the Federal Reserve (Fed) in the wake of Friday's blockbuster US jobs data. The headline NFP showed that the US economy added 353K new jobs in January as against the 180K anticipated. Moreover, the previous month's reading was also revised higher to 333K from the 216K reported. Meanwhile, other details of the report revealed that the unemployment rate held steady at 3.7% and Average Hourly Earnings rose to 4.5% on a yearly basis, both beating consensus estimates. Adding to this, Fed Chair Jerome Powell, speaking in an interview with the US TV show 60 Minutes, reiterated that the March meeting is likely too soon to have the confidence to start cutting interest rates. The markets were quick to react, with the probability of a 150-bps rate cut in 2024 dwindling to just 25% from being nearly certain previously. This, in turn, remains supportive of a further rise in the US Treasury bond yields and favours the USD bulls. Furthermore, geopolitical risks stemming from conflicts in the Middle East, along with worries about slowing economic growth in China, temper investors' appetite for riskier assets. This further benefits the safe-haven Greenback and contributes to keeping a lid on the risk-sensitive Aussie. Bulls might also refrain from placing aggressive bets around the Australian Dollar (AUD) in the wake of growing acceptance that the Reserve Bank of Australia's (RBA) tightening cycle is over and that the next move would be down. The bets were lifted by soft consumer and producer inflation data released last week, which ramped up expectations that prices will fall at an accelerated pace in the coming months. Hence, the market focus will remain glued to the RBA monetary policy meeting on Tuesday. From a technical perspective, Friday's close below the 100-day Simple Moving Average (SMA) for the first time since November was seen as a fresh trigger for bearish traders against the backdrop of last week's breakdown through a short-term range. Apart from this, oscillators on the daily chart are holding deep in the negative territory and are still away from being in the oversold zone. This, in turn, validates the near-term negative outlook for the spot prices, suggesting that any subsequent move-up might still be seen as a selling opportunity. #Aud/usd #Rba #FederalReserve #UsJobsData #InterestRates #UsTreasuryBondYields #MiddleEastConflicts #ChinaEconomicGrowth #ReserveBankOfAustralia #InflationData https://www.fxstreet.com/analysis/aud-usd-outlook-bears-have-the-upper-hand-near-ytd-low-ahead-of-rba-on-tuesday-202402050803

What a blast ========== The US economy added 353,000 nonfarm jobs last month, exceeding expectations of around 185,000 new job additions. The average wage growth unexpectedly accelerated to 4.5%. The probability of a March rate cut from the Federal Reserve (Fed) has fallen to less than 20%, compared to around 80% at the start of the year. The US 2-year yield jumped more than 20bp, the 10-year yield jumped past 4%, and the US dollar index rallied to its highest levels since early December. The EURUSD slipped below the 1.08 level and hit a bearish target of 1.0710. The AUDUSD slipped below its 100-DMA and is testing the 65 cents support. The stock markets were not impacted by the jump in US yields and the retreat in Fed rate cut bets. Gold remains under selling pressure. Ripple price trades around $0.50 ahead of the next key date in the SEC vs. Ripple lawsuit. The main macro driver in focus for the US is the ISM Services PMI for January. The RBA's rate decision is also awaited. The barrel of US crude fell to $72pb level last week and is not much higher this morning despite the US retaliation for last weekend's attacks. The risk of escalation with Iran remains. The first full week of February will deliver a quieter tone compared to last week. The use of this website constitutes acceptance of our user agreement. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. #UsEconomy #JobsData #FederalReserve #InterestRates #UsDollar #StockMarkets #Gold #Ripple #SecLawsuit #OilPrices https://www.fxstreet.com/analysis/what-a-blast-202402050645