Making Sense

Quick Snapshot from yesterday: Solid Beat on the ISM Mfg PMI and Prices Paid component lead to a sharp sell off in Rates and USD Index Moved higher. Crude Prices moved higher / Gold Prices moved higher and US2s10s bear steepened. Fed Fund Rate implied pricing pared back rate cut expectations into 2024 with markets now pricing in 68 bps of rate cuts. Today , we will have the release of the US JOLTS number and the Durable Goods Order. Job Openings have steadily been coming off after the peak in Mar 2022 and were last reported at 8863K. Consensus expectations are for a reading of 8.74M. 105.60 - 105.90 is an important resistance area for the DXY. 

USDJPY / EURUSD / AUDUSD broadly performed in line with expectations as highlighted in the view earlier  with strong gains in JPY and w e hit our  SL on the GBPUSD  trade.  USDINR is seeing a rounded top technical formation and we may be breaking out lower. Today's close will be important and then the next immediate support is seen as 82.66.  Fed Chair Powell's testimony offered nothing new - Fed believes that they are peak of the tightening cycle.  T he statement reflected a cautious approach to monetary policy, with a recognition of the uncertainty surrounding the economic outlook and a focus on achieving the central bank's inflation target while supporting economic growth and employment and the delicate balance that policymakers must strike. The statement acknowledged that if the economy continues to develop as expected, there may be a need to start easing the current policy stance at some point during the year. The Central Bank would follow a data driv...