US dollar consolidates gains as Powell maintains a higher for longer posture.
The US Dollar Index (DXY) falls marginally on Wednesday, as it becomes increasingly evident that markets have won the arm wrestling bout with the US Federal Reserve.
Markets swallow Fed Chairman Powell’s hawkish comments.
The recent rise in both US bond yields and the US dollar was enough to twist the arm of US Fed Chairman Jerome Powell. Powell stated on Tuesday. That recent data shows a lack of additional progress in reducing inflation. And that it would take longer before considering the first rate decrease. There should be sufficient confidence that price increase is slowing to the target level.
Aside from certain secondary figures, no market-moving economic data is expected. More notably, Fed speakers will take the stage immediately following the US session. Including Federal Reserve Bank of Cleveland President Loretta Mester and Federal Reserve Governor Michelle Bowman.
Daily Market movers: Powell’s upheaval.
The weekly Mortgage Bankers Application for the week of April 12 has been issued. Despite higher interest rates, the index rose 0.1% last week and is already up 3.3% this week.
The US Treasury will perform a longer-term bond auction at 17:00 GMT for a 20-year bond.
The Fed’s Beige Book will be released at 18:00 GMT.
At 20:00 GMT, the Treasury International Capital (TIC) Flows for February will be announced.
Net long-term TIC flows are estimated to range from $36.1 billion to $40.2 billion.
Total Net TIC Flows in January were $-8.8 billion, with no prediction for February.
Two Fed speakers are scheduled on Wednesday:
Loretta Mester, President of the Federal Reserve Bank of Cleveland, will take part in the South Franklin Circle Dialogues at roughly 21:30 GMT.
Moreover Michelle Bowman, the Federal Reserve Governor, is scheduled to talk at the Institute for International Finance in Washington, D.C., around 23:15 GMT.
Equities are down again, though the losses are getting less. US equities futures could possibly turn positive later in the session.
Furthermore The CME Group’s FedWatch Tool indicates that expectations for The chances of a Fed pause at the May meeting are 94.6%, with the odds of a rate drop at 5.4%. It appears that markets are retreating off their most hawkish perspective.
Moreover The benchmark 10-year US Treasury Note trades at approximately 4.65%. The benchmark is retreating from Tuesday’s highs of 4.69%.
