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On January 31, Russian Deputy Foreign Minister Grushko stated that the best guarantee for Ukraines security is a concrete guarantee of Russias security, a guarantee that no one in the West has offered. He emphasized, "If we believe that Ukrainian territory will not be used as a bridgehead threatening Russias security, then Ukraines security will also be guaranteed." The Russian Foreign Ministry previously stated that any scenario involving NATO member states deploying troops in Ukraine is absolutely unacceptable to Russia and could lead to a sharp escalation of the situation. The Russian Foreign Ministry also stated that statements from Britain and other European countries regarding the possible deployment of NATO troops in Ukraine are incitement to continue the conflict.January 31st - According to Yahoo Finance, Kevin Warsh, President Trumps nominee for Federal Reserve Chairman, appeared in newly released Epstein case documents released by the US government on Friday. The documents show that Warshs name was listed in the email guest list for the "2010 St. Barths Christmas" event, alongside figures such as Russian oligarch Roman Abramovich; he also attended a dinner hosted by British aristocrat William Astor. This revelation occurred on the same day Warsh was nominated for Fed chairman. His main controversy previously stemmed from his relationship with Republican donor Ronald Lauder, who was accused of influencing Trumps interest in Greenland during his first term and holding business interests there. Warsh may now need to address his relationship with Epstein and his 2010 Christmas trip, and there is also speculation that Trumps nomination is related to their shared social circle.January 31 – With the House of Representatives in recess and unable to consider the appropriations bill, the U.S. federal government entered a technical, partial shutdown at midnight local time on January 31. Analysts point out that although the shutdown is expected to be short-lived, it once again highlights the structural predicament of U.S. fiscal politics. In recent years, temporary funding, short-term extensions, and marginal shutdowns have become the norm in congressional budget battles, with government operations frequently hampered by political disagreements. Currently, the market generally believes that the direct impact of this technical shutdown on financial markets and economic operations is limited, but if subsequent congressional negotiations are again stalled, the risk of a prolonged shutdown and a wider impact cannot be ruled out.January 31st - The US government officially began a partial shutdown early this morning local time. This followed the Senates passage of a spending bill to fund most federal government departments, which was then submitted to the House of Representatives for consideration. However, because House members were not in Washington and would not return until Monday (February 2nd), the Senate vote could not prevent a partial government shutdown.January 31st - According to the UKs Daily Telegraph, British Prime Minister Keir Starmer responded to US President Trumps remarks on Sino-British cooperation in Shanghai on the 30th, stating that ignoring China would be "unwise." "It would be unwise to simply say we should ignore it. You know, French President Macron has already visited (China) and had exchanges, and German Chancellor Merz is also coming to exchange views," Starmer said. "It would not be in our national interest for Britain to be the only country refusing to engage (with China)." Starmer added, "In the past 24 hours, the opening of market access has been warmly welcomed by the business community. They have reported a change in the atmosphere and a significant increase in willingness to cooperate. This is good for our economy."

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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