<ul><li style=““ class=“text-align-justify“>Does not think ECB has to choose between fighting inflation and avoiding a recession</li><li style=““ class=“text-align-justify“>The better economic environment makes our monetary task easier</li></ul><p style=““ class=“text-align-justify“>Is peak inflation the new ‚transitory‘ talk? We may very well be heading towards that direction it would seem.</p>

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

<p style=““ class=“text-align-justify“>The start of the week saw a gap higher in the pair as it seems like the government is teeing up BOJ deputy governor Amamiya to be the successor to Kuroda at the central bank. While the jump is encouraging, it still doesn’t really take away from the downside trend that has been persisting since late October last year.</p><p style=““ class=“text-align-justify“>The sequence of lower highs, lower lows is still relatively intact and I would argue that it will take a push back above 135.00 from here to invalidate that pattern and pose some added questions.</p><p style=““ class=“text-align-justify“>Otherwise, as mentioned <a target=“_blank“ href=“https://www.forexlive.com/news/mind-the-gap-20230206/“ target=“_blank“ rel=“follow“>here</a>, there are still reasons for sellers to stick with their conviction for a push lower in USD/JPY in the months ahead.</p><p style=““ class=“text-align-justify“>The push lower today isn’t much as it just eats a bit into the gap higher from yesterday. All eyes will be on Fed chair Powell’s speech/interview later today but just be mindful that if there are more headlines on the potential next BOJ governor, that will also impact the yen side of the equation.</p><p style=““ class=“text-align-justify“>As things stand, there is still ongoing pressure on 10-year JGB yields at the 0.50% ceiling and that continues to tell the story that markets remain convinced of some form of policy change by the Japanese central bank down the road.</p>

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

<p style=““ class=“text-align-justify“>Will we get a repeat today? S&P 500 futures are down 33 points, or 0.8%, as the selling momentum from Friday last week continues to reverberate. However, let’s not forget that even with the hotter US jobs report, there was a brief period that stocks pared losses in Wall Street before the late stumble again.</p><p style=““ class=“text-align-justify“>Despite some early stumbles in the past two weeks, we can see how Wall Street has the appetite to turn things around as dip buying becomes more prevalent. Is that a sign of changing sentiment in the market? Well, we’ll have to wait and see.</p><p style=““ class=“text-align-justify“>But if anything, Friday’s drop after the early recovery is a sign that perhaps dip buyers won’t have it so easy as there are certain quarters of the market which are more cautious and/or perhaps <a target=“_blank“ href=“https://www.forexlive.com/news/is-the-market-just-scaring-itself-or-is-the-fear-justified-20230206/“ target=“_blank“ rel=“follow“>scaring themselves</a>.</p><p style=““ class=“text-align-justify“>Also, from a technical perspective, there are some challenges despite the attempted breakout by buyers in the S&P 500 last week – as pointed out <a target=“_blank“ href=“https://www.forexlive.com/news/risk-stays-in-retreat-mode-to-start-the-new-week-20230206/“ target=“_blank“ rel=“follow“>here</a>.</p>

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

<p>UPCOMING
EVENTS:</p><p>Tuesday: RBA
Policy Decision, Fed Chair Powell speaks.</p><p>Thursday: US
Jobless Claims.</p><p>Friday:
University of Michigan Consumer Sentiment.</p><p>What an end
of the week it was last Friday. The <a target=“_blank“ href=“https://www.forexlive.com/news/us-nonfarm-payroll-517k-vs-185k-estimate-unemployment-rate-34-vs-35-estimate-20230203/“ target=“_blank“ rel=“follow“>labour
market report</a> showed 517K jobs added vs. 185K expected, which is almost
double even the most optimistic forecasts. The unemployment rate came in at
3.4% vs. 3.6% expected, which is the lowest since May 1969. People rushed to
call it “too good to be true”, maybe it is but recent beats in <a target=“_blank“ href=“https://www.forexlive.com/news/us-december-jolts-job-openings-1101m-vs-1025m-expected-20230201/“ target=“_blank“ rel=“follow“>Job
Openings</a> and <a target=“_blank“ href=“https://www.forexlive.com/news/us-weekly-initial-jobless-claims-183k-versus-200k-estimate-20230202/“ target=“_blank“ rel=“follow“>Jobless
Claims</a> are testimony of the extremely tight labour market.</p><p>Later on
that day, we got another big beat in the <a target=“_blank“ href=“https://www.forexlive.com/news/ism-us-nonmanufacturing-pmi-index-552-versus-504-estimate-20230203/“ target=“_blank“ rel=“follow“>ISM
Services PMI</a> report, which bounced back strongly from the contractionary
territory to 55.2 vs. 49.2 in the previous month. New orders sub-index, which
is a proxy for demand, went from expansion to contraction in the previous
report to expansion again with the latest one. Looks like the easing in
financial conditions sparked immediately a reacceleration in economic activity.
</p><p>This is
something that will make the Fed’s job much trickier going forward as they try
to bring inflation back to their 2% target while getting close to their
projected pause. If this trend is to continue, we may see not only a “higher
for longer” policy, but a “higher-er for longer” one. The market had a quick
rethinking on Friday and is repricing its future interest rates expectations.
The <a target=“_blank“ href=“https://www.tradingview.com/chart/CIPuZN0R/“ target=“_blank“ rel=“follow“>2 year note’s yield</a>,
which is more sensitive to Fed’s policy, jumped by more than 20 bps and
reversed completely the drop seen in the aftermath of the FOMC Policy Decision.
The market’s expectation for the terminal rate also rose to 5.04% vs. 4.90% before
Friday. </p><p>The US
Dollar gained across the board on Friday, and given the Friday’s data, we
should see some repricing going forward. Technically, the swing support at
101.25 held and we may see a run to the 108.00 level.</p><p>Tuesday: The RBA is
expected to hike by 25 bps bringing its cash rate to 3.35%. The central bank is
expected to reiterate its willing to increase rate further and be data
dependent until inflation is seen returning to their 2-3% target band. As a
reminder, recent inflation data surprised to the upside with the Y/Y figure
coming at 7.8% vs 7.5% expected.</p><p>The market
will focus more on Fed Chair Powell and see what he has to say about the recent
huge beat in the labour market report. There will also be other Fed speakers
throughout the week.</p><p>Thursday: Given the
focus on the labour market, the US Jobless Claims is something to keep an eye
on. We saw beats after beats in the data and the big surprises on either side may
be market moving. The expectation for Initial Claims is 194K. </p><p>Friday: The
University of Michigan Consumer Sentiment survey is expected to tick up again
to 65.0 from the prior 64.9 in January. The market will keep an eye on
inflation expectations data in the report. </p><p>This article
was written by Giuseppe Dellamotta.</p>

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

<p>Last Friday the <a target=“_blank“ href=“https://www.forexlive.com/news/us-nonfarm-payroll-517k-vs-185k-estimate-unemployment-rate-34-vs-35-estimate-20230203/“ target=“_blank“ rel=“follow“>NFP
report</a> surprised everyone with a huge beat to expectations, 517K jobs added
compared to 185K expected, and the unemployment rate fell to 3.4%, the lowest
in 53 years. The average hourly earnings though remained unchanged at 0.3% M/M
and fell to 4.4% Y/Y. Looks nice with labour market strength and wage
disinflation. Soft landing vibes… </p><p>Some time later the <a target=“_blank“ href=“https://www.forexlive.com/news/ism-us-nonmanufacturing-pmi-index-552-versus-504-estimate-20230203/“ target=“_blank“ rel=“follow“>ISM
Services PMI</a> surprised to the upside with a big jump back into
expansion. Activity in the services sector seems to have picked up again, which
makes wonder if the recent easing in financial conditions led to a
reacceleration in economic activity. </p><p>Looking forward, will this make it harder
for inflation to come back to the Fed’s 2% target? And will the Fed need to go
higher than projected in their December 2022 meeting?</p><p>S&P500 Technical Analysis</p><p>On the daily chart above, we can
see that the price couldn’t break the 4175 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>resistance</a> after very strong economic
reports. Maybe the bulls are getting cautious as the Fed may be forced to go
higher with interest rates or indeed hold for longer than previously expected. </p><p>The bulls will need a clear break
out of that resistance to target the next resistance at 4300. The blue minor
upward <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“ target=“_blank“ rel=“follow“>trendline</a> for now will act as support for
the bullish trend. A break below that trendline and things start to get
interesting for the bears.</p><p>On the 4 hour chart above, we can
see that the price is struggling at the resistance. From a risk management
standpoint, a pullback to the trendline and one of the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“ target=“_blank“ rel=“follow“>Fibonacci
retracement levels</a> would offer a better risk to reward trade. </p><p>Looking at the 1 hour chart, we can see the two possible
scenarios: </p><p>·
Get
above the 4208 resistance and the bulls can try to extend the move to the next
resistance at 4300.</p><p>·
Get
below the 4133 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>support</a>
and it opens up a move lower to possibly 4050 with a breakout below the
trendline leading to further sell off.</p>

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

<p>Last Friday the <a target=“_blank“ href=“https://www.forexlive.com/news/us-nonfarm-payroll-517k-vs-185k-estimate-unemployment-rate-34-vs-35-estimate-20230203/“ target=“_blank“ rel=“follow“>NFP
report</a> surprised everyone with a 517K gain vs. 185K expected. The number was
much higher than even the most optimistic forecasts. The unemployment rate fell
to 3.4%, the lowest in 53 years. This brought back fears of a possible
reacceleration in inflation as the labour market is still extremely tight and
wages may start to rise again. </p><p>The Fed is trying to get
inflation back to its 2% target and it’s hard to envision such a scenario with
a labour market this strong. Inflation may get to 3% or 4%, which would be a
failure for the Fed and if too much time passes by, people may start to change
their expectations around the 2% inflation, which would make the Fed’s job even
harder.</p><p>The <a target=“_blank“ href=“https://www.forexlive.com/news/ism-us-nonmanufacturing-pmi-index-552-versus-504-estimate-20230203/“ target=“_blank“ rel=“follow“>ISM
Services PMI</a> report also showed a reacceleration in economic
activity for the Services sector as the data made a big jump back into
expansionary territory. If the market had doubts on the Fed’s willing to hike
to 5.00-5.25% and stay there for longer, the last week should have cleared
those doubts.</p><p>Nasdaq Composite Technical Analysis</p><p>On the daily chart above, we can
see that the price after breaking out of the 10200-11500 range, rallied towards
the next <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>resistance</a> at 12274 where it got rejected
after the blockbuster NFP report. Given the new uncertainties on the monetary
policy side, we can expect a pullback before another push higher. </p><p>On the 4 hour chart above, we can
see that the blue upward <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“ target=“_blank“ rel=“follow“>trendline</a> is now the support for the
current uptrend. </p><p>If the price falls below the
trendline and the previous resistance now turned <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“ target=“_blank“ rel=“follow“>support</a>, the bears will regain control
and target the lower band of the previous range at 10200. For the bulls a break
above the 12274 resistance is needed to target the next resistance at 13191.</p><p>Drilling down to the 1 hour chart
above, we can see the possible scenarios. From a risk management perspective,
the bulls should wait for the price to retrace back to the trendline where
there is also support from the previous swing high and a 61.8% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“ target=“_blank“ rel=“follow“>Fibonacci
retracement level</a>. </p><p>The risk would be well defined.
In case the price breaks down the trendline and the previous resistance turned
support at 11500, it would open up opportunities for the bears to target the
next support at 10200. </p>

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

<p>After a busy week with a lot of economic events and the decisions of
central banks in focus, this one is likely to be a quiet one, as is usual
following the NFP print.</p><p>The BoE and ECB hiked the rates by 50bps and Fed by 25bps, while all of
them signalled that more hikes will follow. The market now expects another
50bps hike at the next ECB meeting in March, and a 25bps hike from the
BoE. </p><p>The NFP came in high above expectations and the unemployment rate fell to
3.4% — the lowest it’s been in 50 years. The market is now pricing in another
25bps rate hike for the next FOMC meeting in March, but the Fed is data
dependent and until then we’ll have two more CPI reports and another NFP print.
Even so, the bank is unlikely to change its hawkish tone.</p><p>Fed Chair Powell described the labour market as „extremely tight“
based on the recent data, which indicates that the Fed wants to see more
softening before considering any rate hike pause. However, UBS analysts warn
that the payroll growth in January might have been fuelled by temporary factors
like the mild winter weather and these are actually broader signs the labour
market is cooling off to some extent.</p><p>The focus Tuesday will be on the RBA cash rate and rate statement. Fed
Chair Powell is expected to speak in a moderated discussion at the Economic
Club of Washington DC and it will be interesting to see what he has to say
about the latest jobs report. BoC Governor Macklem is also scheduled to speak
on how monetary policy works at a conference hosted by the Chartered Financial
Analyst of Quebec. These talks shouldn’t create market volatility, but it’s
worth keeping an eye on them.</p><p>Thursday we’ll have the monetary policy report hearing in the U.K.,
followed by a busy Friday with the U.K. GDP m/m print, the employment change
and unemployment rate in Canada and the preliminary UoM consumer sentiment and
inflation expectations in the U.S.</p><p>A few Fed members are also scheduled to deliver their remarks this
week. </p><p>The RBA is likely to hike the rate by 25bps, but according to some
analysts, the market has this priced in already. The stubbornly high inflation
in Australia poses a big problem for the bank and suggests the hiking cycle
might not be over, but the market will watch for any change in language that
could indicate a pause. At the December meeting the RBA stressed that it is not
on a pre-set course.</p><p>In the U.S. the focus will be on the consumer sentiment and inflation
expectations data. The high gasoline prices will likely lead to an increase of
the 1-year inflation expectations median, but the 5-to-10-year expectations
will remain the same at 2.9%, according to Citi.</p><p>In Canada, even though the net employment change could see a strong median
rise by 25k, the unemployment rate could increase to 5.1% from 5.0% as a result
of stronger immigration and therefore higher participation in the labour
market, Citi analysts said.</p><p>In the U.K. GDP data will show whether the economy entered a technical
recession during the second half of last year, according to Wells Fargo.
Overall, the economic situation is expected to be negatively impacted in the
near future with consumer spending under pressure.</p><p>USD/CAD expectations</p><p>On the H1 chart the USD/CAD closed the week near the 1.3415 resistance. A
correction is expected until the 1.3350 level of support. If that level holds,
the next target could be 1.3515.</p><p>The BoC raised the rates to 4.5% and signalled that it will keep them at
this level. Other hikes could follow in the future as necessary to keep
inflation under control, but for now the pause in the hiking cycle was a dovish
surprise. The Governor also noted that rate cuts are not on the table at this
point when asked about recession risks.</p><p>USD/CAD has prospects for further appreciation in the near future.</p><p>U.S. Dollar Index (DXY) expectations</p><p>After stronger than expected jobs data the possibility of any rate cuts has
been pushed further away. On the H1 chart the DXY looks good for buying opportunities.
A correction is expected until the 101.80 level of support and if that level
holds, the next target could be 103.90.</p><p>On the downside the next levels of support are at 101.30 and 100.70. </p><p>This article
was written by Gina Constantin.</p>

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

<p>Ignazio Visco is Governor of the Bank of Italy and thus a European Central Bank Governing Council member.</p><p>He spoke over the weekend in front of Italy’s Assiom-Forex financial markets association.:</p><ul><li>“The policy tightening can now continue with the due caution, carefully assessing the implications for the economy and inflation prospects of the measures that have already been adopted“ </li><li>said that unwarranted excess tightening would have „serious implications“ for economic activity and financial stability</li><li>said short-term inflation expectations have dropped sharply and longer-term ones remain under control</li></ul><p>Info via Reuters. </p><p>—</p><p>Huh, Visco’s jawboning tilting a little less hawkish after the 50bp rate last week:</p><ul class=“text-align-start vertical-align-baseline“><li class=“vertical-align-baseline“><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecb-sources-see-at-least-two-more-rate-hikes-20230202/“ rel=“follow“ target=“_self“ class=“article-link vertical-align-baseline“>ECB sources: See at least two more rate hikes</a></li><li class=“vertical-align-baseline“><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-lagardewe-intend-to-raise-rates-by-50-bps-the-next-meeting-then-monitor-the-path-20230202/“ rel=“follow“ target=“_self“ class=“article-link vertical-align-baseline“>ECBs Lagarde:We intend to raise rates by 50 BPs @ the next meeting & then monitor the path</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecb-raises-key-rates-by-50-bps-in-february-monetary-policy-meeting-as-expected-20230202/“ rel=“follow“ target=“_self“ class=“article-link“>ECB raises key rates by 50 bps in February monetary policy meeting, as expected</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.

<p>An interesting weekend item from Reuters about oil, but also about circumventing trade payments in the dominant USD – helping Russia to de-dollarise its economy.</p><ul><li>Indian refiners have begun paying for most of their Russian oil purchased via Dubai-based traders in United Arab Emirates dirhams instead of U.S. dollars</li><li>India’s top bank, the State Bank of India (SBI), is now clearing these dirham payments, the sources told Reuters</li></ul><p><a target=“_blank“ href=“https://www.reuters.com/business/energy/indian-refiners-pay-traders-dirhams-russian-oil-2023-02-03/“ target=“_blank“ rel=“nofollow“>Reuters</a> cite four sources (unnamed) for the information. More detail at that link. </p><p>—-</p><p>The background top this is that banks and financial institutions are cautious about clearing payments, not wanting to unintentionally violate the sanctions imposed against Russia after its invasion of Ukraine. The Russian oil price cap has been imposed by the Group of Seven nations and Australia.</p><p>Indian (and Chinese) purchases of Russian oil may not be in violation of sanctions, but, exercising an abundance of caution, Indian refiners and dealers are concerned they may not be able to continue to settle trades in dollars. Hence thus of UAE dirhams (code is AED).</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/us-stocks-close-lower-but-still-higher-on-the-week-20230203/“>US stocks close lower but still higher on the week</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/wti-crude-oil-futures-settled-at-7339-20230203/“>WTI crude oil futures settled at $73.39</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-daly-the-number-was-a-wow-number-the-december-fed-policy-is-a-good-indicator-20230203/“>Fed’s Daly: The number was a „wow“ number. The December Fed policy is a good indicator.</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-total-rig-count-falls-12-to-759-20230203/“>Baker Hughes total rig count falls -12 to 759</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/european-indices-close-the-day-with-mixed-results-20230203/“>European indices close the day with mixed results</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/ism-us-nonmanufacturing-pmi-index-552-versus-504-estimate-20230203/“>ISM US nonmanufacturing PMI index 55.2 versus 50.4 estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/spglobal-services-pmi-index-versus-a-468-versus-466-preliminary-20230203/“>S&P/Global services PMI index versus a 46.8 versus 46.6 preliminary</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/the-strong-us-jobs-report-sent-the-us-dollar-sharply-higher-what-next-20230203/“>The strong US jobs report sent the US dollar sharply higher. What next?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-nonfarm-payroll-517k-vs-185k-estimate-unemployment-rate-34-vs-35-estimate-20230203/“>US nonfarm payroll 517K vs 185K estimate. Unemployment rate 3.4% vs 3.5% estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bank-of-england-pill-i-expect-we-will-proceed-with-qt-over-the-coming-years-20230203/“>Bank of England Pill: I expect we will proceed with QT over the coming years</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/the-gbp-is-the-strongest-and-the-cad-is-the-weakest-as-the-na-session-begins-20230203/“>The GBP is the strongest and the CAD is the weakest as the NA session begins</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/forexlive-european-fx-news-wrap-dollar-mixed-equities-lower-ahead-of-nfp-20230203/“>ForexLive European FX news wrap: Dollar mixed, equities lower ahead of NFP</a></li></ul><p>The US jobs report was – as Fed’s Daly put it – a „wow“ number. The Non Farm Payroll increased by a whopping 517K. The prior two months were revised higher by 71K. The combined total of 587K far outpaced the expectations of 185K. Wow is right. </p><p>The unemployment rate moved down to 3.4% (expected a rise to 3.6%), the lowest since 1969. The average hourly earnings increased by 0.3% and the YoY by 4.4% which were as expected. The work week increased to 34.7 hours from 34.3 hours expected. That is a big jump and indicative of solid employment. </p><p>The number was more the initial claims and the JOLTs data vs the anecdotal stories of layoffs.</p><p>It had some analysts saying, „it is so good, ignore it“, which I guess is another way of saying, „My model is right. The BLS is wrong“. However, the reality is, the jobs data continues to show month after month strength. </p><p>Looking at the industries: </p><p>Good producing jobs added 46K </p><ul class=“text-align-start vertical-align-baseline“><li class=“vertical-align-baseline“>manufacturing +19</li><li>construction +28K</li></ul><p>IN the service jobs, they added 397K </p><ul class=“text-align-start vertical-align-baseline“><li>professional and business services 82K</li><li class=“vertical-align-baseline“>private education and health services +105K</li><li class=“vertical-align-baseline“>trade transportation and utilities +63K</li><li class=“vertical-align-baseline“>transportation and warehousing +23K</li><li class=“vertical-align-baseline“>Leisure and hospitality rose 128K</li><li class=“vertical-align-baseline“>information -5K </li><li class=“vertical-align-baseline“>financial activity minus 6K</li></ul><p>Government even added a chunk with a gain of 78K</p><p>Later the ISM nonmanufacturing index came in much stronger than expected at 55.2 versus 50.4</p><ul><li>new orders index rose to 60.4 from 45.2 last month</li><li>employment back to the 15 level from 49.4 last month</li><li>prices dip to 67.8 from 68.1</li><li>backlog of orders rose to 52.9 from 51.5</li><li>new export orders search to 59.0 from 47.7</li></ul><p>Recession? What recession?</p><p>The US stocks initially took the news as more bearish as the Fed might need to hike more and keep the rates higher for a time period longer than the market’s expectations. However, when momentum slowed on the decline, the major indices moved back to the upside and erased all the declines for the day. That was also in the face of less than stellar earnings from Amazon, Alphabet and Apple after the close on Thursday. Intraday, </p><ul><li>The Dow was down as much as -240.09 points, and reverset to up 125.63 points</li><li>The S&P was down as much as -56.39 points, and reversed to up 2.61 points</li><li>The Nasdaq was down as much as -253.96 points, and reversed to up 30.49 points</li></ul><p>However, the climb was a tough one and buyers turned back to sellers. Word that Fed’s Daly would be speaking on FoxBusiness, may have been a catalyst to take some off the table. Recall, Daly was a bit more hawkish on the inflation prospects when she spoke on January 9th just before the blackout period. She was particularly insistent that the goods inflation was coming down, but service inflation ex housing was still elevated. </p><p>The stock buyers had the courage of 1000 matadors in the morning hours, but cowered a bit with the prospects of a Fed official coming out and saying „we are still data dependent“, inflation is still elevated, and „it was far to early“ to call a peak (which is what she reminded the market). </p><p>Next week, when more Fed officials speak, it will be hard to say things are slowing down. In reality, the employment situation seems like it is doing the opposite – despite the job cuts announced, and that will continue to be a scare to the Fed who only has one job – to see inflation comes down. </p><p>In the debt market. yields moved higher and stayed elevated for the day:</p><ul><li>two year yield 4.288% +19.9 basis points</li><li>five year yield 3.653% +17.1 basis points</li><li>10 year yield 3.520% +12.3 basis points</li><li>30 year yield 3.615% +6.1 basis points</li></ul><p>Gold tumbled in reaction to the higher dollar. It is closing down near -$46 or -2.44% at $1865.63 after moving to within $41 of $2000 yesterday (the high reached $1959.74). Silver tumbled 4.67% or down -$1.09. </p><p>Crude oil focused on the higher dollar and it too fell even though stronger growth might lead to more demand down the road. Crude oil closed the week down -7.89% </p><p>The USD was the strongest of the majors rising by over 2% vs the NZD (+2.29%), AUD (2.16%) and was up 1.97% vs the JPY. The only currency the USD rose by less than 1% today was the CAD with a gain of only 0.69%.</p><p>For the trading week, the USD rose vs all the major currencies:</p><ul><li>EUR, +0.67%</li><li>JPY, +1.09%</li><li>GBP, +2.7%</li><li>CHF, +0.55%</li><li>CAD, +0.70%</li><li>AUD, +2.61%</li><li>NZD, +2.54%</li></ul><p>It certainly was a Wow day (and a Wow week as well with 3 major central banks in play, and an earnings week highlighted by the likes of Meta, Apple, Alphabet, Amazon, Boeing, Merck, Honeywell, Starbucks). </p><p>Next week, the calendar of events will be a little less packed. Nevertheless, the anticipation of what Fed officials might say is intriguing and potentially market moving. ON Tuesday at 12 PM, Fed’s Powell will speak at the Economic Club of Washington. On Wednesday, NY Fed’s Williams will also speak (and I am sure others Fed officials will be asked to comment on policy post the jobs report). </p><p>The Bank of Australia is expected to hike rates by 25 basis points on Tuesday in Australia (Monday night at 10:30 PM ET).. Recall Australia CPI for Q4 came in at 1.9% vs 1.6% estimate when announced on January 24. Canada will release their employment report on Friday a month after reporting an oversized gain of 104K last month. The expectations are for 15K on Friday. The BOC raised rates by 25 bps on January 25th and said they were „conditionally pausing“ as they assess the economic data going forward. That will be a key data point for their rate hike sabbatical. </p><p>Taking a look at the calendar of earnings, the major releases are now over. Next week there are a few names but the impacts should be minimal:</p><p>Monday:</p><ul><li>Pinterest</li><li>Activision Blizzard</li></ul><p>Tuesday:</p><ul><li>Chipotle</li></ul><p>Wednesday</p><ul><li>Disney </li><li>CVS</li><li>Emerson</li><li>MGM</li></ul><p>Thursday</p><ul><li>Toyota</li><li>Pepsi</li><li>AstraZeneca</li><li>Phillip Morris</li><li>Unilever</li><li>PayPal</li><li>Motorola</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.