Market Analytics and Considerations
Key Notes
The marketplace already has reduced its expectations for the FOMC meeting in Feb and is currently only eyeing a 25 basis point rate increase. Commerzbank economists observe that the Dollar is unwelcome.
Fairly pessimistic outlook for the dollar
Looking at producer prices Wednesday, the PCE deflator, and the wage costs component at the conclusion of the month would be worthwhile. The marketplace will be pleased for any report that leans further towards 25 than toward 50 bps on Feb 1. Nevertheless, because the market has indeed decreased its projections for the following rate move, the bulk of the change in the data’s impact on the US dollar is anticipated to be minimal.
The problem of the debt limit is sure to receive more and more attention throughout the week. Even though the debate is really only expected to become increasingly contentious in the spring, it could still assure that the Greenback is prevented from achieving further advances in the present Dollar-negative climate, while also ensuring that pressure gradient in EUR/USD will predominate for the time being.
