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Market Recap – Jerome Powell in control

Wednesday, September 18, 2019 10:48 AM GMT

Yesterday the Saudi Arabia minister announced that most of the country’s oil output has already been restored and it will fully recover within weeks, something that was reported as a running estimate at our yesterday's Market recap. Consequently, the Traders of the ZuluTrade community  are turning their focus into the FOMC and the press conference of Jerome Powell.

The current probability for a rate cut is only 56%. On the one hand, there is disappointing foreign growth, decreasing US manufacturing activity and an ongoing trade tension between the USA and China. On the other hand, there is a decent job growth, enough to provide jobs to the younger Americans entering the workforce, wage growth, unemployment at historic low levels, unit labor cost picking up, and inflation (core PCE) at 1.6% with the latest core CPI m/m increasing.

Jerome Powell has already communicated in several occasions that the monetary policy is not the tool to respond to trade uncertainties. With the trade negotiations scheduled to restart on October and the above nice macro picture, the FED could potentially resist from cutting (especially while the July’s rate cut was presented as a one-off middle cycle adjustment)

Macro releases: Other than the FOMC meeting, the UK, the European and the Canadian inflation are published today. Full economic calendar is here.

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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