Category: Federal Reserve System

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Interbank market news scan: Last week’s expectation of no Fed rate hike accompanied a lack of volatility in the foreign exchange market.

Last week, the Federal Open Market Committee of the Federal Reserve System decided to keep the target range for the federal funds rate between 5.00% and 5.25%. As the foreign exchange markets got closer to the 14 June 2023 decision, spreads in trade of EUR/USD, GBP/USD, USD/JPY, and AUD/USD got closer between 12 and 13 … Continue reading Interbank market news scan: Last week’s expectation of no Fed rate hike accompanied a lack of volatility in the foreign exchange market.

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A quiet Monday morning before the Federal Open Market Committee meeting …

I sit in the group that sees a 19.6% chance that the FOMC increases the fed funds target range by 25 basis points to a range of 5.25% to 5.50%. For the asset-less, wage earning class, we may benefit from rate increases due to greater returns on the cash we accumulate. Also, for those of us who were able to hoard cash, falling asset prices may give us a chance to accumulate other income generating assets or purchase non-income generating assets and convert them into money makers. Continue reading A quiet Monday morning before the Federal Open Market Committee meeting …

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Interbank Market News Scan: Between debt ceiling banter and the unemployment rate, where will the EUR/USD land tomorrow?

If there is an increase in average wages accompanied by a year-over-year inflation rate of 4.4%, as reported by the U.S. Bureau of Economic Analysis’ personal consumption expenditure index, I don’t see why the markets would expect a pause by the Board of Governors in raising the discount window and interest on reserve balances rates and changing its federal funds overnight target range. Continue reading Interbank Market News Scan: Between debt ceiling banter and the unemployment rate, where will the EUR/USD land tomorrow?

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Interbank Market News Scan: Is one and done is out of the window according to CME Fed Watch?

The stats … 30-Day Federal Funds Futures and Options (ZQV3): 94.735 Effective Federal Funds Rate: 5.08% Discount Window Rate: 5.25% Interest on Reserve Balances: 5.15% 10-Year Treasury Note: 3.80% EUR/USD=1.0713 USD/JPY=140.5300 DXY=104.07 The takeaway … The dollar strengthens and I see less demand for the euro and the yen. According to data from the Federal … Continue reading Interbank Market News Scan: Is one and done is out of the window according to CME Fed Watch?

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Interbank Market News Scan: As the money supply falls, asset values fall as well…

The few that control financial and natural resources are as much afraid of uncertainty as you or I. Quelling uncertainty requires a model for managing expectations and in a credit-driven political economy that means determining before-hand where interest rates and yields should end up. Continue reading Interbank Market News Scan: As the money supply falls, asset values fall as well…

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The Interbank Market News Scan: I expect the euro to continue dropping throughout the day… 8:45 AM EST

Looming in the background is the negative impact a slowed down economy will have on the Biden Administration and to a lesser extent the incumbents in the Congress. As the Biden Administration and the Congress negotiate the debt ceiling, there is the threat that fiscal policy in the form of higher taxes may be offered up as a way to shore up lacking tax revenue. This will also put a crimp on household and business spending. Continue reading The Interbank Market News Scan: I expect the euro to continue dropping throughout the day… 8:45 AM EST

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Interbank Market News Scan: I expect the EUR/USD to close above 1.0808 tomorrow.

The Stats … 30-Day Federal Funds Options (ZQV3): 94.99 Source: CME Group. Effective Federal Funds Rate: 5.08% Discount Window: 5.25% Interest on Reserve Balances: 5.15% EUR/USD=1.0856 USD/JPY=135.6300 GBP/USD=1.2464 AUD/USD=0.6649 NZD/USD=0.6193 Source: Board of Governors-Federal Reserve System. DXY=103.04 Source: MarketWatch. Today’s Definition: Effective federal funds rate “A volume-weighted median of transaction-level data collected from depository institutions.” … Continue reading Interbank Market News Scan: I expect the EUR/USD to close above 1.0808 tomorrow.

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Interbank Market News Scan: What retail traders should look at from the Federal Reserve perspective at 8:43 am EST.

The Stats … 30-Day Federal Funds Futures and Options: 95.135 Source: CME Group. Effective Federal Funds Rate: 5.08% Federal Funds Target Range: 5.00% to 5.25%. Discount Window: 5.25% Interest on Reserve Balances: 5.15% U.S. Ten-Year Treasurys: 3.39% EUR/USD=1.1026 USD/JPY=134.8500 GBP/USD=1.2650 AUD/USD=0.6747 NZD/USD=0.6299 Source: Board of Governors-Federal Reserve System. https://traderswithedge.com/?r=348. Today’s Definition: market maker. “A firm … Continue reading Interbank Market News Scan: What retail traders should look at from the Federal Reserve perspective at 8:43 am EST.

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Interbank Market News Scan: Fed funds, bitcoin, and foreign exchange rates at 9:40 am EST

The takeaway: The role of government is to feed the bond markets … Markets are not the creation of people. Markets are the creation of kings and courts designed to encourage the efficient extraction of energy, yield, and taxes. The king’s currency is a derivative of real money, the yield and energy produced by the … Continue reading Interbank Market News Scan: Fed funds, bitcoin, and foreign exchange rates at 9:40 am EST