Yesterday’s congressional testimony by Fed Chairman Jerome Powell ignited the dollar’s appreciation again. Reacted to the suggestion that the pace of interest rate hikes could be accelerated. In the market, it was the timing before the release of the US employment statistics, and it seems that there were many voices assuming a well-balanced remark. In the midst of this, his remarks became even more hawkish, and the market has revived expectations for a significant interest rate hike. Expectations for a 50bp rate hike in March rose to 73.5% in the latest CME FedWatch. Yesterday it was in the minority at just over 30%.
Chairman Powell is wary of rising inflation, and future economic indicators, such as the strength of the economy and trends in inflation, are likely to attract even more attention. I’m scheduled to testify before the House today, so I’d like to note the difference from yesterday just in case.
The US economic indicators announced today include the weekly MBA mortgage application index, the number of ADP employees in February, the trade balance in January, and the number of JOLT job openings in January. In particular, the market is likely to react to the strength of employment-related indicators. Also, in the second half of New York, the Federal Reserve Bank Economic Report (Beige Book) will be published. I would like to check whether there is any change in the degree of heat in business sentiment.
Although the direction of the US dollar appreciation is correct, it is a pity that yesterday’s dollar-yen buying was cut. The stop was too close while the mullet was increasing.
After recovering, the major trend continues to be dollar-buying.
However, at 22:15 U.S. ADP employment numbers 22:30 U.S. trade balance, there is a possibility that there will be another adjustment movement. Once the dollar/yen pair makes a big drop, we plan to enter the market with buying.