Fed meeting amongst market movers today – Danske Bank

Sandeep Kanihama FXStreet Contributor

Danske Bank analysts suggest that the key focus today will be the Fed meeting tonight, where we look for another rate cut of 25bp but no pre-commitment to further cuts.

Key Quotes

“Another 'mid-cycle adjustment' cut is warranted by weak global growth and high uncertainty, while a still strong US consumer puts the Fed on a 'meeting-by-meeting path' to gauge the need for how much further support the economy needs.”

“We see a risk that markets will be disappointed from what might be perceived as a hawkish rate cut. We still expect the Fed to ultimately cut five times in total until March 2020 as we look for weak global growth and high uncertainty to prevail for some time. The tensions in the Middle East have only added to the uncertainty.”

“Saudi state television said the Saudi Defense Ministry will hold a media conference on Wednesday that will show evidence of Iran's involvement in the Aramco attacks, including the use of Iranian weapons.”

“On the economic front we get UK inflation and final euro area inflation for August and US housing starts.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

AUD/USD trims losses, still near 0.6900

AUD/USD remains well on the defensive, adding to Wednesday’s pullback and trading close to the key 0.6900 contention zone ahead of the opening bell in Asia. Discouraging prints from the Australian labour market report have weighed on the Aussie, which has remained unable to take advantage from the marked pullback in the Greenback.

USD/JPY slides back below 158.00 as USD reverses post-CPI gains

USD/JPY extends the previous day's pullback from a three-week high, attracting follow-through selling and sliding below 158.00 during Thursday's Asian session. Traders remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. The US Dollar, meanwhile, reverses Wednesday's hot CPI-led gains to April 2025 highs as US bond yields retreat on China bond-buying talk, further pressuring the pair.

Gold: Upside remains capped by $4,200

Gold regains the smile and leaves behind three consecutive days of losses, advancing to the $4,170 region per troy ounce on Thursday. The precious metal’s recovery comes amid the fresh offered stance in the Greenback and declining US Treasury yields while investors remain cautious ahead of the Fed’s Warsh speech on Friday.

Bitcoin rebounds to $82,000 as PPI hits 6.3%, nearly $1B liquidated

Bitcoin (BTC) recovered near $82,000 on Thursday after briefly falling below $80,000, paring losses triggered by hotter-than-expected US inflation data. September PPI inflation rose 6.3% YoY, exceeding forecasts of 5.3% and marking its second-highest level since November 2022. Core PPI inflation climbed to 5% annually, above expectations of 4.4%.

The Iran war will eventually end. Tariffs won't. Here's the problem

Two cost shocks are in the September Consumer Price Index (CPI), and they have different half-lives. Energy is up 20.4% on the year and accounts for about 1.3 points of the 3.7% headline, and that shock reverses when Oil does: Brent was back at its pre-war price on July 1 and above $100 again by the end of the month, after the ceasefire collapsed on July 8.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.