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A court ruling shows that a U.S. appeals court has suspended an order restricting federal immigration officials enforcement tactics during protests in Chicago.On November 20th, gold prices gave back some of their gains after the release of the latest Federal Reserve meeting minutes, with market participants focusing on upcoming US economic data for new clues about the path of US interest rates. The minutes of the October Fed policy meeting showed that despite policymakers warning that lowering borrowing costs could impact inflation control after four and a half years of growth above the 2% target, the divided Fed decided to cut interest rates last month. Fed Chairman Powell stated in unusually blunt terms at the post-meeting press conference that a rate cut at the December meeting was "not a done deal." Marex analyst Edward Meir pointed out, "The minutes are a done deal; whats more important is observing the developments in December. The Fed needs more data to make its decisions. Scattered data releases will be the focus of market attention." The CME FedWatch Tool shows that traders currently expect only a 30% probability of a rate cut in December.Fitch: U.S. state budgets are being tested by slowing revenue growth and shifts in federal policy.xAI: Grok will also be integrated into Humain One, the proxy platform of Saudi AI startup Humain.November 20th - The minutes of the Federal Reserves October meeting showed that short-term funding market conditions in the United States tightened significantly during the break, but remained orderly. Towards the end of the break, the spread between the effective federal funds rate and the reserve interest rate narrowed to its narrowest level since the Fed began its balance sheet reduction in 2022. The guaranteed overnight funding rate repeatedly fell below the minimum bid rate of the Standing Repo Facility, leading to frequent use of this tool. Average usage of the overnight reverse repo facility fell to its lowest level since 2021. These changes collectively indicate that reserve balances are gradually (downward) approaching ample levels.

As China's official PMI rises, the USD/CNH exchange rate fluctuates below 6.7600

Daniel Rogers

Jan 31, 2023 16:38

The USD/CNH currency pair is experiencing unpredictable volatility as a result of the National Bureau of Statistics (NBS) of China releasing strong official PMI data. The Official Manufacturing PMI has hit 50.1, exceeding both the 49.7 consensus expectation and the 49.0 level from the prior month. In addition, the Non-Manufacturing PMI has grown from 51.0 to 54.4. Despite the fact that households were preoccupied with celebrating the Lunar New Year in January, the scale of economic operations in China increased considerably.

 

The Caixin Manufacturing PMI data, which will be issued on Wednesday, will be the catalyst for a ferocious move in the Chinese Yuan. The economic indicators may rise to 49.5, up from 49.0 earlier.

 

As a result of the elimination of restrictions on the movement of people, products, and machines, China's economy is operating at full capacity. According to a Reuters poll, China's economic growth is anticipated to return to 4.9% in 2023 before stabilizing in 2024, as policymakers pledge to bolster support for the COVID-ravaged economy. In addition, the People's Bank of China will cut the Loan Prime Rate (LPR) by 5 basis points (bps) in the first quarter of CY2023, according to the survey.

 

In the interim, the risk-off impulse is regaining traction as S&P500 futures have surrendered more than half of the gains made by Asia's early trading session. As the Federal Reserve (Fed) prepares to raise interest rates to achieve its inflation objective of 2%, risk-perceived assets are anticipated to remain volatile. Fed chair Jerome Powell is likely to announce a 25 basis point (bps) interest rate hike due to the sharp declines in consumer spending and the Producer Price Index (PPI) in the United States economy.


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