- Full steam ahead of the US dollar into the weekend
- Major US indices all close lower with the Dow leading the way
- Crude oil futures settle at $70.86
- US dollar moving higher as traders react to Waller comments
- US National Security Advisor: Iran nuclear talks 'not going well'
- Waller: The whole point of the faster taper was to make March a live meeting
- Fed's Daly: Expect above-trend growth next year and moderating inflation
- The Bakers Hughes oil rig count rose by 4 to 475
- Fed's Waller: Inflation alarmingly high, hike will be warranted shortly after taper ends
- Jump in lumber prices emphasizes US housing strength
- Emerging Currencies: A New Attraction Against The Global Economic Backdrop
- Fed's Williams: Inflation is too high right now
- The JPY is the strongest and the NZD is the weakest as the NA session begins
The day was void of economic data, but with the FOMC meeting in the rear view mirror, it gave Fed officials the ability to open their mouths as to their views on the economy/policy.
After Fed's Williams looked like he was a bit uneasy answering questions on CNBC about inflation and why the Fed was still buying bonds (stimulating) despite too high inflation, the Fed's Waller seemed a bit more direct. What caught the markets attention was the comment that "the whole point of the faster taper was to make March a live meeting".
The March 15-16 meeting is the 2nd meeting in 2022. The Fed announced they would taper by $30B starting in January. It seemed that given the current level and the accelerated taper of $30 billion, it would take little longer than March 16th (like toward the start of the 2H. With the Waller comments, suddenly rates might be going up a quarter earlier.
Needless to say, the comment took the market a bit by surprise. Expectations for a March hike rose to over 56%.and subsequent months also increased. The Fed did project the Federal Funds rate would be 0.9% at the end of the year. Suddenly if March was live and the Fed did hike then, there are 6 meetings between March and the end of the year. The forex "market" said "HMMMM" (I could hear it), and dollar buying ensued into the close.
Looking at the strongest to weakest currencies, the USD was the strongest of the majors, while the NZD is the weakest.
The US dollar rose most versus the commodity currencies (CAD, NZD and AUD).
In other markets as the week comes to a close:
- Spot gold is trading near unchanged at $1797. The precious metal started to come off it's gains up to $1814.27 as the dollar got stronger and stronger
- Spot silver is trading down $0.10 or -0.44% $22.37. It too was much higher $22.67 before reversing and coming back lower.
- WTI crude oil futures are trading at $70.30 that's down $-1.85 on the day.
- Bitcoin moved lower and traded below a low swing level at $45,750, but could not sustain momentum in is trading back at $47,000 as the 5 o'clock hour approaches on Friday. Of course bitcoin stays open all weekend so the trading never ends, but the bounce near support gave the longs some comfort
In the US stock market today, the major indices all closed lower on the day, and closed lower for the week. European shares also closed the week in the red.
In the US debt market today, the shorter end yields did move higher. The two year yield traded as low as 0.603% and is trading near 0.6437% at the end the day up 2.3 basis points. However the longer end continues to come under pressure with the 30 year now down at 1.821%. That was down -4.0 basis. The 10 yield, less than a month ago, was trading up at 1.69%. The traded as low as 1.372% today. A bit strange given the taper.
