EUR/USD 1.14678
0.039%
Gold 4283.75
0.465%
Oil 96.816
-0.681%
USD/JPY 155.995
-0.180%
GBP/USD 1.33813
0.011%
GBP/JPY 208.749
-0.166%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
RSM Chief Economist Joseph Brusueras: Warsh delivered the right hawkish signals at the press conference and attempted to reinforce the Fed’s credibility in restoring price stability, while also enhancing his own credibility.U.S. stocks continued to decline after the Walsh press conference, with the S&P 500 falling 1%, its biggest drop since July 29, the Dow Jones Industrial Average down 1.65%, and the Nasdaq Composite down 0.6%.On September 17th, Federal Reserve Chairman Warsh declined to answer questions at a press conference regarding his interactions with US President Trump. Trump has been calling for lower interest rates in recent months. Warsh stated, "I have no comment on my discussions with the president." White House Council of Economic Advisers Chairman Christopher Phelan said on Tuesday that raising interest rates would be a "mistake."On September 17th, Federal Reserve Chairman Warsh stated that he would not disclose details of future interest rate decisions by the Federal Open Market Committee (FOMC). He said, "I am not responsible for providing forward guidance. Our decision today (to raise interest rates) is a carefully considered, serious, and responsible one. We have been preparing for and thinking about this decision for the past 110 or 120 days." Warsh also stated that this decision was not market-driven. He said, "Our decision today is based on our assessment of the current situation, our judgment of the employment trend, and our assessment of the strength of the economy. Sometimes, the market tries to anticipate our decisions. I watch market prices to see what information the market is sending. But todays decision is our own."On September 17th, Warsh stated that while the Federal Reserve cannot prevent price shocks in commodities such as oil on its own, the central bank can use policy tools to prevent further spread of inflationary pressures. Warsh said, "We cannot influence the price of any single commodity, such as oil or groceries." However, he pointed out, "We can and will ensure that any changes in relative prices do not spread further, and do not have second- or third-order effects on the economy. Thats our responsibility, and thats what were doing." Warsh made these remarks as U.S. diesel prices hit a record high due to the Iran war.

EUR/USD recovers from low US inflation, EU energy plans, and trade talks

Daniel Rogers

Sep 14, 2022 11:44

截屏2022-09-14 上午9.45.02.png 

 

EUR/USD bids jumped to 0.9980 during Wednesday's Asian session due to US inflation-driven losses near the weekly low. In doing so, the main currency pair consolidates the greatest daily loss in the past two years prior to diplomatic efforts by the European Union (EU).

 

The US inflation data released on Tuesday revived concerns about the Federal Reserve's rapid rate hike and compounded recession fears. China and Russia-related geopolitical concerns are also acting as bearish factors for the EUR/USD. Despite this, the US Consumer Price Index (CPI) rose 8.3% year-over-year in August, above market estimates by 0.1%. In contrast, the monthly data increased to 0.1%, surpassing the -0.1% projected and the 0.0% seen in previous reports. The core CPI, or CPI excluding food and energy, also surpassed the 6.1% consensus and 5.9% prior to printing at 6.3% for the relevant month.

 

In contrast, Eurozone ZEW Economic Sentiment fell to -60.7 in September, compared to the expected -52 and the prior reading of -54.9. The sentiment indicator for Germany declined to -61.9, compared to market expectations of -60 and previous readings of 55.3. Following the announcement of the statistics on Tuesday, German Economy Minister Robert Habeck warned, "We face the potential of a recession next year." Similarly, the German economic outlook for the second half of the year has deteriorated dramatically, and second-half output may stagnate or decline.

 

Notable is the increase in hawkish Fed bets, with next week's 75 basis point (bps) rate hike looking increasingly plausible. At its meeting on September 21, there is a 25% chance that the US Federal Reserve (Fed) will announce a full 1% increase in the benchmark Fed rate.

 

After US inflation data, the inversion between short-term and long-term US Treasury bond yields deteriorated and exacerbated recession fears, which impacted on the EUR/USD due to the pair's reputation as a risk-barometer. However, following the announcement of the data, the yields on 10-year US Treasury notes increased to 3.412% and those on 2-year bonds increased to 3.76%, up from approximately 3.411% and 3.745%, respectively. In addition, following the release of the US CPI, US stocks saw their worst daily loss in over two years, which affected the pair.

 

Additionally, Sino-American tensions are exacerbated by US Vice President Joe Biden's efforts to highlight China's problems and the drive for better relations with China. In addition, market sentiment and the EUR/USD exchange rate were impacted by concerns that Russia could retaliate brutally after withdrawing from certain regions of Ukraine.

 

Recently, US President Joe Biden declared, "I am unconcerned by today's inflation figure," adding that the stock market is not always a reliable predictor of the strength of the economy. The cause may be tied to the greatest drop in US stocks in two years following the publication of US inflation data.

 

Ursula von der Leyen's plans for energy price capping and US Trade Representative Katherine Tai's visit to the European Union (EU) to see European Commission Vice President Valdis Dombrovskis will be vital to track for future developments. Prior to Thursday's US Retail Sales for the month of August and Friday's preliminary September Michigan Consumer Sentiment Index reading, the US Producer Price Index (PPI) will also be crucial.


Suggestion