• The next phase is not when to reduce rates, even though that’s where the markets are at
• It is about how long do we need monetary policy to remain restrictive in order to get inflation back to 2% target
• Markets are a little bit ahead
• They have jumped to the end part i.e. „we are going to normalise quickly“, and I don’t see that
• Fed’s policy settings are now in a good place
• But you don’t want to inadvertently become more restrictive than what you think is appropriate

The full interview from the FT can be found here (may be gated). This echoes the comments from Williams on Friday. But it highlights a failure in communication by the Fed somewhat, in having to walk back Powell’s press conference last week.

This article was written by Justin Low at www.forexlive.com.

Last week, the Dow Jones surged to new highs
following the surprisingly dovish FOMC decision where
the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell
delivered some dovish comments. In the last part of the week, we got a slate of
soft-landing data as the US Jobless Claims and Retail Sales beat
expectations, while the US PMIs missed on the manufacturing side and beat on
the services one.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones last
week surged to a new all-time high following the dovish FOMC decision. The
rally since the end of October has been pretty insane with very shallow
pullbacks which points to either a short squeeze or lots of FOMO. Waiting for
pullbacks didn’t provide any opportunity, but chasing such rallies is generally
a bad idea as they can reverse most of the gains once a negative catalyst hits
the market.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from
a risk management perspective, the buyers would be better off leaning on the trendline where
they will find the confluence with
the previous all-time high level and the red 21 moving average. The
sellers, on the other hand, will want to see the price breaking below the
trendline to position for a drop into the 35683 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action and we can notice that the buyers will also
find the confluence with the 38.2% Fibonacci
retracement level around the trendline. This makes it
a strong support zone where the buyers will lean onto to position for another
rally while the sellers will want to see the price breaking lower to invalidate
the bullish setup and target new lows.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. On Wednesday, we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims data, while on Friday
we conclude the week with the US PCE report.

This article was written by FL Contributors at www.forexlive.com.

• In the real world, there’s inevitably a degree of inaccuracy in economic
  measurement
• Currently, there’s a little more uncertainty
  than usual about the behaviour of unemployment
• Official estimates of wage growth have
  been volatile
• Other indicators have exhibited slightly lower rates
  of growth through much of this year
• It takes time to understand the forces driving
  the economy, particularly services inflation and wage growth
• It will probably require a
  more protracted and clearer decline in wage growth data before we can safely conclude
  that things are on a firmly downward trend
• Full speech

That’s a really long and roundabout way of saying that „we still don’t see enough data to justify a policy pivot yet“.

This article was written by Justin Low at www.forexlive.com.

It’s been a quiet start to the week and not too surprising as markets are looking to wind down for the year already. The dollar benefited from NY Fed president Williams‘ comments late on Friday, but is seen trading more mixed and mostly little changed today. USD/JPY is up 0.3% to 142.50 levels now, running back up against its 200-day moving average (blue line) at 142.55:

That comes despite Treasury yields sitting lower today with 10-year yields down 3 bps to just under 3.90% currently.

Going back to USD/JPY, keep below the 200-day moving average and sellers will continue to retain a more bearish bias in the pair for the time being.

Elsewhere, EUR/USD is up 0.2% to 1.0913 with large option expiries at 1.0910 in play. GBP/USD is down marginally at 1.2670 while AUD/USD is up 0.4% to 0.6725 as the antipodean currencies are keeping a more positive start to proceedings this week. NZD/USD is also up 0.5% to 0.6235 even with a lack of headlines to work with.

Both the aussie and kiwi are building on technical breaks from last week, with equities also consolidating at the highs for the year for now.

This article was written by Justin Low at www.forexlive.com.

Macy’s shares surged approximately 20% following the
announcement of a $5.8 billion takeover bid. This suggests Macy’s might become
a private company, with its shares being acquired at a 32% premium to the $16
price. However, some analysts advise against hasty decisions and recommend
adopting a wait-and-see position. Let’s delve into the developments surrounding
this major chain of department stores.

Star takes center stage on the Macy’s logo, and perhaps
that’s the reason why its stock shone like December stars, experiencing a 20%
surge after reports of an investor consortium intending to acquire Macy’s
business, including a buyout of shares at a $21 price per share.

In fact, the share price grew to $21 but later adjusted to
$19. The reasons behind this adjustment will be discussed shortly.

Notably, a buyout price of $21 falls short of Macy’s
stock’s all-time high. Considering this year’s results, it becomes evident that
the asset is in red. Anyway, for consistently growing stocks, one might want to
explore
the Apple stock chart. There are few things in the world as stable as that.

As you already know, Macy’s stock grew due to the takeover
bid news. But why did a noticeable adjustment occur afterward? Some analyst
teams, with
Citi leading the way, are skeptical about the possible bid. They believe that
Macy’s business structural troubles, the current interest
rates situation, and the decline of Macy’s property value might pose
obstacles to financing the deal.

Plus, the prospects of department store businesses are
ambiguous. We are living in the era of online shopping, rapid deliveries, and
one-click orders. These factors led Citi to downgrade the analyst rating of
Macy’s stocks to Sell.

However, it’s possible that some specialists underestimate
the probability of the bid as well as the adaptability of department stores.
Macy’s and other companies in this sector do not stand still – they are
enhancing their online capabilities.

Predicting Macy’s future is challenging. If you’re seeking
trading opportunities here, closely monitoring the news and conducting your own
research is crucial.

This article was written by ForexLive at www.forexlive.com.