From Marc Chandler at Bannockburn Global Forex:
The US dollar is firm against the G10 currencies ahead of the US January CPI. The week began with news that Chinese officials were encouraging de-risking from US Treasuries. Helped by stronger than expected January employment data, the greenback pared its losses. Separately, and counter-intuitively, the Japanese yen and Japanese bonds have rallied in the aftermath of the LDP’s dramatic victory. Despite the heavier tone for the yen today, it is the strongest of the G10 currencies this week, rising almost 2.5% against the dollar ahead of today’s North American session.
The Fed funds futures have pushed the next Fed rate cut into July from June. The June meeting is the first Warsh will chair if the confirmation hearings proceed normally, which is not a sure thing given the objections to the investigation into the Federal Reserve for cost overruns in its renovations. Still, there is about a 75% chance of a cut still discounted for June. Meanwhile, reports indicate that the Trump administration is considering narrowing the scope for import duties on some metal products. Several industrial metal prices softened in response. The Supreme Court has a decision day next Friday and a ruling on the president's tariff power is possible. Lastly, with the US markets closed on Monday, liquidity may dry up earlier than usual today. Note that Chinese markets are closed now until February 24 for the New Year celebration....
....MUCH MORE
