"In any case, the most likely source of dollar downside should come with repricing around the terminal rate, currently standing around 2.75-3%. With Wednesdays FOMC announcement coming alongside fresh economic forecasts, a weak inflation reading today could help drive down expectations of price pressures for the year ahead. Precious metals are turning higher as we close out a somewhat choppy week, with the end of the federal reserve quantitative tightening program lifting expectations of increased liquidity in the year ahead."
"Wednesday's ADP payrolls figure saw the biggest monthly decline in private job creation since March 2023, and thus a decline in today's core PCE inflation metric would undoubtedly tilt the dynamic further in favour of a cut. In any case, the most likely source of dollar downside should come with repricing around the terminal rate, currently standing around 2.75-3%. With Wednesdays FOMC announcement coming alongside fresh economic forecasts, a weak inflation reading today could help drive down expectations of price pressures for the year ahead."
European stocks opened higher ahead of a US core PCE inflation release that could cement expectations for a December Fed rate cut. German factory orders rose 1.5% in October, led by a 9.9% surge in domestic military and defence demand offset by a 4% drop in foreign demand. The DAX reached a three-week high despite earlier losses. ADP showed the largest monthly private job decline since March 2023, and a weaker core PCE would strengthen the case for a cut. Repricing around a terminal rate near 2.75-3% could pressure the dollar. Precious metals rose as quantitative tightening ends and a $13.5 billion overnight repo highlighted liquidity strains.
Read at London Business News | Londonlovesbusiness.com
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