Federal Reserve Chair Jerome Powell announced that the central bank will not be making any changes to interest rates at this time. This decision was made after careful consideration of the economic data and the outlook for the future.
Results for: Economic Data
Yung-Yu Ma, Chief Investment Officer at BMO Wealth Management, joined CNBC’s ‘Fast Money’ program to provide his perspectives on the latest economic data and the potential path of interest rates in the coming months.
CNBC’s ‘Mad Money’ host Jim Cramer highlights the significant events that will influence market movements in the coming week. These events include the highly anticipated Consumer Price Index (CPI) data, the Federal Open Market Committee (FOMC) meeting, and several major earnings reports from prominent companies.
The US dollar retreated from recent highs, trading slightly lower ahead of the release of key economic indicators. Meanwhile, the Japanese yen continued its decline, falling to its lowest point against the dollar since 1990. The broader economic landscape remains a key driver for currency movements, with the dollar expected to maintain its dominance until signs of a slowdown in US economic exceptionalism emerge.
The S&P 500 experienced a negative closing yesterday as it encountered key resistance levels. The relief rally, driven by weaker-than-expected inflation data, reached a pivotal point. However, concerns about the labor market cast a shadow over the rally. Important economic data releases are scheduled for the coming week, including the US Q1 GDP and Jobless Claims figures. Technical analysis indicates that the S&P 500 is facing resistance at the 5104 level, where several moving averages converge. Further resistance exists at the 38.2% Fibonacci retracement level on the 4-hour chart and the 5042 level on the 1-hour chart. Bulls and bears will closely monitor these levels to determine the market’s next move.
The Russell 2000 experienced a decline yesterday, halting the recent relief rally as it approached crucial resistance points. With the start of the new month, a deluge of critical economic data is expected, potentially influencing market dynamics. On the daily chart, the Russell 2000 has retreated to the 2020 level, where sellers anticipate a break below the 1920 support. Buyers, however, aim to invalidate the bearish setup and push prices higher. On the 4-hour chart, the price faces opposition from the downward trendline and the 50% retracement level, providing impetus for sellers. Conversely, a breakout above the trendline could reverse the trend for buyers. The 1-hour chart reveals a potential breakout from the range, with sellers cautiously monitoring a spike above the trendline and buyers aiming to invalidate the bearish scenario. Key economic data set to be released includes the US Q1 GDP and the latest US Jobless Claims figures, with the US PCE report concluding the week tomorrow.
US stock index futures declined on Wednesday evening due to renewed weakness in heavyweight technology stocks after Meta Platforms Inc. (META) issued disappointing second-quarter guidance. The technology sector was particularly vulnerable as Meta’s guidance raised concerns about increased spending on artificial intelligence impacting earnings growth. Treasury yields also surged, adding pressure to stock markets as investors anxiously await key economic data that will influence the Federal Reserve’s interest rate decisions.
Asian markets are facing uncertainty due to the depreciation of currencies against the U.S. dollar. The Bank of Japan’s two-day policy meeting, South Korea’s GDP data, Malaysian inflation figures, and trade figures from Vietnam and Hong Kong will be key market movers. Concerns about the weakening yen could prompt intervention by the Japanese authorities. Indonesia’s recent rate hike has also raised eyebrows. Meanwhile, geopolitical tensions between the United States and China persist, with the U.S. Senate voting to potentially ban TikTok.
The USD/JPY currency pair has broken above the 155 level, a fresh high since 1990. The move was aided by comments from an LDP official indicating no immediate plans for intervention. The Canadian dollar also gained ground against the US dollar following a weaker retail sales report, reaching 1.3725. However, a late-day decline in the US dollar helped the pound and euro recover.
Goldman Sachs analysts have expressed skepticism about the GBP/USD’s ability to break through the 1.23 level without significant movement in the EUR/USD. Positive economic data from Europe has influenced trader expectations and added complexity to the currency dynamics. Goldman Sachs advises caution in anticipating significant movements in the GBP/USD without corresponding shifts in the EUR/USD.