The release of the FOMC’s meeting minutes from the Fed’s late-April policy decision will be the market’s focus today. Traders are bracing for a more hawkish tilt given the most recent string of strong inflation and labor readings, allowing the Fed to push back its rate cut timeline. The meeting minutes are scheduled for release at 2pm ET.
The USD and U.S. Treasury yields are higher, and equities, gold and Bitcoin are lower, a not-too-common alignment of differing market sectors preparing for the Fed to sweep away hope of any rate cuts this year. Fed Funds futures now imply only a single 25 basis-point cut this year, down from seven cuts originally forecasted as recently as January.
The dollar has gained vs. 8/10 of the G10 currencies: +0.35% vs. CHF, +0.32% vs. SEK, +0.29% vs. AUD, +0.24% vs. JPY, +0.18% vs. EUR & DKK, +0.16% vs. NOK and +0.13% vs. CAD. The dollar is -0.17% vs. GBP and -0.38% vs. NZD.
Overnight, New Zealand’s central bank (RBNZ) kept rates unchanged for its 7th consecutive meeting and indicated rate policy will need to remain constrictive for longer given stubborn inflation (sound familiar?). This lifted the NZD which is leading all major currency gains in trading today.
Gold’s $2,449.89 record high (set on Monday) and recent support at $2,410.00 will be the range until the Fed’s meeting minutes are evaluated and eventually converted into actionable trading signals. Gold technicals are bullish, now in the 8th month of its short-term uptrend pointing to likely higher levels.
