FXCM Market Talk Your Trading & Finance Podcast

The non-farm employment change published at 209K. This was lower than the 224K expected and lower than the last print at 306K. These are signs of cooling down, but the job market remains overall strong. The Fed minutes were released last Wednesday but did not give us any new information and a 25-bps hike is still likely at the Fed’s next meeting. This week UK jobs data showed high average earnings, which will be a concern to the Bank of England. Later in the week we get US inflation data and Q2 earnings is set to kick off with the big banks’ earnings and Delta airlines. We also see central bank releases from the Reserve Bank of New Zealand and the Bank of Canada.

At the ECB’s symposium in Sintra, Portugal, Fed Chair Powell was hawkish, looking to align markets with the latest dot-plot projection of another two interest rate hikes for this year. US final GDP printed significantly higher than preliminary indications. Headline PCE declined but the core number was sticky. This week, the US celebrates its Independence Day holiday, with the first two days having light liquidity. Wednesday sees the FOMC minutes released, and Friday has the US non-farm employment change scheduled.

Last week, Fed Chair Powell testified on Capitol Hill with a hawkish testimony, but it was the UK inflation print and BoE’s 50bps hike that got the markets attention. This week is the ECB Sintra Forum with Wednesday scheduling a key panel discussion. Inflation prints out of the US, Canda, Australia, and Eurozone will be keenly followed, with final GDP numbers out of the US and UK towards the end of the week.

China CPI and PPI disappointed last week. This week US CPI will be released on Tuesday and the Fed statement is scheduled for Wednesday. The market is pricing in a pause but given the RBA and BoC surprise hikes last week, it is going to be close. Thursday has the ECB expected to hike by 25 bps and Friday will see the BoJ Policy Rate announcement. Tune in to this week’s podcast as our analysts discuss these stories.

Last Friday’s NFP surprised to the upside printing at 339K – 193K was expected. Fed speakers talk about a skip in rate hikes and markets have repriced around this. Saudi Arabia announced a 1 million barrels/day cut for the month of July with an option to extend. The Reserve Bank of Australia surprised markets with a 25-bps hike but Bank of Canada is still expected to hold. On Friday we get another measure of Chinese demand as it releases its CPI. These plus more in this week’s podcast.

Last week saw inflation coming in ahead of expectations. This has led to markets repricing the path of Fed hikes. US GDP came in better that expected but German GDP reflects technical recession. After a 90-minute call on Saturday, there is a debt ceiling deal which needs to be ratified by both Houses. Non-Farm Payrolls will be released this Friday, providing the next clue for rates. Listen in for these stories and more.

On Friday, during a panel discussion, Fed Chair Powell suggested that rates may not climb as much as expected due to credit tightening. Other Fed speakers suggest that FOMC members are developing diverging views. China data hints at a slowing momentum in recovery and EU CPI is still too high. This week sees two more inflation data points – core PCE on Friday and UK inflation on Wednesday. Wednesday will also see the release of the FOMC minutes. Listen to FXCM Market Talk for these stories and more.

Last week, US headline inflation came in under 5% for the first time in two years. Core inflation was 5.5% y/y and is still looking sticky. Chinese CPI was a disappointing 0.1% y/y and Chinese factory-gate inflate declined 3.6% y/y. We also saw the BoE raise rates by 25 bps to 4.50%. This week will see a host of Fed speakers with Fed Chair Powell participating in a panel discussion on Friday. Chinese and US retail sales and industrial production will be released on Tuesday and Euro final inflation y/y numbers will print on Wednesday. Join our discussion for these topics and more.

The NFP showed higher average hourly earnings and a lower unemployment rate than expected. The FOMC statement suggests a pause, the RBA delivered a surprise rate hike and the ECB increased rates by a smaller increment. This week we get CPI data on Wednesday and the BoE is expected to increase its official bank rate by 25bps. Disney is set to release results this week and Friday delivers UK GDP and industrial production.

UK headline CPI came in above 10%; forecasts were for a single digit print. EUR CPI also suggest sticky elements to inflation. ECB and Fed official’s commentary were hawkish in nature. The job market is still tight but initial unemployment claims have started to tick up.  Markets will be looking at US GDP and core PCE for direction. This week includes Government Ueda’s first BoJ meeting and it is a big week for tech results with Meta, Alphabet, Amazon, and Microsoft reporting.

Last week’s FOMC minutes indicate a small recession near year end. Headline CPI declined but core inched up slightly. University of Michigan Inflation Expectations came in higher than previous. China’s GDP beat forecast and UK inflation expected to decrease into single digits. Other regions reporting CPI include Canada, EU, and Japan. Friday sees flash PMIs reported. Banks kicked off Q1 earnings last week with Netflix and Tesla to release this week.

The non-farm employment change shows that the labour market is slowing but still resilient. This week will see CPI and retail sales released. Tightening seems to be making an impact. FOMC minutes will be released on Wednesday with Australian employment data and UK GDP and industrial production out on Thursday. Q1 earning seasons is set to kick off this week with airlines and banks.

As PCE shows signs of moderation, OPEC+ announces supply cut of more than 1m barrels per day from May. FXCM senior market specialists, Russell Shor and Nikos Tzabouras discuss its potential impact on inflation. This Friday sees the NFP release and the RBA and RBNZ are due to announce expected rate hikes on Tuesday and Wednesday respectively.  This week also has PMI releases. Please join us for the conversation.

Join FXCM market specialists, Russell and Nikos as they discuss the current crisis in confidence surrounding the banking sector. In addition, the ECB has raised rates by 50bps and now all eyes turn to the Fed. However, it is uncertain that they will raise rates given the instability in the banking sector. This week also sees the BoE rate announcement.

Chair Powell’s testimony in front of the Senate and House was hawkish and aggressive. Higher for longer and faster were introduced. The market briefly priced in a possible 50bps hike for March. However, the failure of Silicon Valley Bank, lower wage inflation and the uptick in the unemployment rate has the market rethinking this. Moreover, tomorrow sees inflation data – the next piece in the puzzle. Tune in to listen to FXCM market specialists, Russell Shor and Nikos Tzabouras.

FXCM senior market specialist, Russ and Nik, discuss several key events for the week. Fed Chair Powell will testify in front of the Senate (Tues) and House (Wed). The market will be eager to hear any hints on rate hikes or the terminal rate. This Friday the jobs data for February will be released. Last data point was a big surprise higher and the market will look here in anticipation. The RBA is expected to hike by 25bps with the BoC is on hold. Please listen in on these and more.

Join FXCM senior market specialists, Russ and Nik, as they discuss the themes driving the markets for this week. In this podcast, the two analysts discuss the Fed minutes that were released last week and how they differed from Fed Chair Powell’s press conference. Core PCE also came in ahead of expectations, with inflation being a primary driver. Join the discussion for these and more.

Last week’s CPI and PPI release show a stickiness to inflation. The market seems to be coming around to the Fed’s view whilst several Fed officials talk up interest rates. This week the Fed’s minutes will be released on Wednesday and Friday sees the all-important core PCE release. Join FXCM senior market specialists Russ and Nik as they discuss these and more.

Following the blowout jobs report, markets are largely data driven. This week sees a slew of important data. Out of the US inflation, retail sales and industrial production. On the UK front, the calendar has jobs, CPI and retail sales and the EU will see GDP on Tuesday. Diplomatic relations between the US and China are deteriorating rapidly following last week’s shooting down by the US of a Chinese balloon as well as three other objects over the weekend. Market specialists, Russ and Nik, discuss these and more.

Last Week:

· NFP 517K vs 190K forecast.

· Unemployment 3.5%-->3.4%

· Wage data came in as forecast at 0.3% m/m.

· PMI non-manufacturing data is strongly back above 50.

· Fed raises rated by 25bps on Wed.

· Hawkish but more relaxed.

· Powell talked about the disinflation process.

· Did not validate December projections.

· Offered little push back against the market.

· Opened the door to potential pivot (in case of overshoot).

· Following NFP, terminal rate is pushed back one month, and markets sees 5.25%.

· Employment coming back into focus: will unemployment increase.

· ECB: raised by 50bps and committed to another 50bps in March in statement.

· Intentions are to hike passed March.

· President Lagarde acknowledged more balanced risks to inflation outlook.

· ECB likely more hawkish than Fed.

· BoE: No surprises but unclear guidance.

· Softened communication but didn’t signal pause.

· Comment – may be at the turning point but not necessarily done.

This week:

· Powell: moderated discussion Economic Club of Washington (Tuesday).

· RBA cash rate:  25bps after recent inflation surprise?

· Williams (NY Fed president) interview with Nick Timiraos on Wed.

· UK GDP on Fri.

· China/US relations are strained after US shoots down “spy” balloon.

· Tech Earnings: BP, Disney. Last week Meta, Amazon, Alphabet, Apple.

Last Week:

· US - PCE: Core 4.4% y/y; moving in the right direction and lowest print in a year. 0.3% m/m.

· GDP came in looking good on the surface but may have hidden weakness (consumer).

· Australia CPI: inflation came in higher than expected. Likely adds another 1-2 hikes to the cycle.

· BoC: Hiked by 25bps - peak rate. Looking to monitor transmission mechanism.

This week:

· Fed: 25 bps (priced in). Will the Fed send a strong message? Fed funds futures still pricing a pivot.

· Can they deliver on 3 more hikes of 25bps? Seems like a tall order.

· ECB on Thursday. Market does not expect dovishness. Likely going 50bps.

· Still waiting for communication on terminal rate.

· December statement and commentary are pointing to another 50bps after this one.

· BoE: Forecasts give another 50bps, but not convinced here. Going to come down to the vote split.

· NFP: Forecast: 175-195k (previous 223K). 3.5%-->3.6% unemployment rate.

· ISM Services - last print was a big surprise to the downside (49.6). Will it be able to reclaim 50?

· Earnings: Meta, Apple, Alphabet, AMZN, TSLA reported last week (beat expectations).

Last week:

• Poor retail data and industrial production (PPI)
• Fed speakers:
• Brainard, Harker, Waller: —> rate hikes but Harker, Waller (amongst others) for 25 bps going forward. Blackout period for the Fed.
• BoJ: Surprise to markets but not to economists. Kept 50bps defence level on JGBs. Door for normalisation is open. Upgraded CPI forecast for the year.This week:
• Chinese markets are closed for the Lunar New Year celebration.
• Oil moving on the back of China optimism.
• Hawkish commentary by the ECB.
• BoC to hike by 25bps?
• US: PCE on Friday, Q4 GDP on Thurs.
• Inflation for AU, NZ - both on Wed.
• Earnings: MSFT, TSLA.
• NFLX came in last week —> beat subscriber forecast by 66%.

In this week’s podcast FXCM senior market specialists, Nik and Russ, talk about:

· CPI came as expected. Headline was at 6.5% (6.5%). Core was 5.7% also around expectations, lowest reading in over a year.

o Following release, CME Fed watch tool had over 90% chance of 25bps.

o Markets are loose, worth watching.

o Brainard, Waller and other speaking this week.

§ Will they talk hawkishly or not?

o Harker from Philly maintained 25bps.

· World Bank 2023 GDP growth slashed.

· Banks earnings: markets reacted positively but some questions.

o Dealmaking is down.

o Credit costs are up

· Bank of Japan – will they abandon yield curve control?

o 50bps has already been breached.

· CPI: CAD, UK, Eurozone.

· Wed PPI à in relation to CPI

· Retail sales:  US, CAD, UK

· NFLX on Thur (first of FAANGS)

This is our first podcast in 2023. FXCM senior market specialists Russ and Nik discuss:

• Friday’s NFP.
• Job data shows deceleration in job growth, moderation in wages, participation rate ticked up.
• Services PMI.
• PMI shows contraction. US is a service-based economy. First time since June 2020 it contracted.
• Factory Orders biggest decline since June 2020.
• FOMC minutes were hawkish, no member sees rate cut this year.
• December CPI is released on Thursday. Most likely moderated, but all eyes are on the release.
• Q4 earning season kicks off on Friday with the Banks and Delta.
• China has opened its borders–oil has reacted and the general mood has improved because of the opening.

• Fed raised by 50bps. Less aggressive, but higher TR upped to 5.1 (4.6). Fed chair was hawkish.
• ECB even more hawkish than Fed. 50bps ongoing and QT announced. Hawkish ECB is a more convincing case — more ground to cover, but more difficult to deliver because of the fractious nature of the bank.
• BoE delivered 50 bps and was the least hawkish of the three. There was a three-way split: 0, 50bps, 75bps.
• There is a disconnect between the banks and the market. Market’s expect cuts in H2 2023. Fed dismisses this.
• Data is confusing and ambiguous. Services PMI beat to the upside, but industrial production and retail sales were both down (weak). CPI also showed signs of moderating.

This week:

• BoJ — some reports suggesting an announcement regarding the 2% inflation target. CPI out as well (Fri).
• CPI Canada - Wed.
• US PCE data on Friday. May take lead from CPI and moderate.
• Final GDP on Thurs q/q 2.9% (US), -0.2% (UK).

In this week's podcast, FXCM senior market specialists Nik and Russ discuss central banks' potential pausing. In addition, the two analysts discuss the inflation data, specifically the CPI release, which precedes the Fed's next rate hike by a day. Moreover, the BoE and ECB will hike on Thursday, with all three central banks expected to deliver 50bps. All these and more.

Average hourly earnings surprised to the upside, printing at 0.6% MoM - double the 0.3% MoM expected. This has raised the spectre of a wage inflation spiral. Markets are edgy and are reacting to bullish and bearish news. Upside surprises continued with ISM Services PMI and factory orders beating forecast. The ECB has indicated a minimum of 50bps for its hike. Join FXCM Senior Market Specialists Russ and Nik as they discuss these and more. 

In this week's podcast, FXCM senior market specialists, Russ and Nik, discuss the aggressive hike by the RBNZ despite other banks signalling a slowdown in pace. In addition, the two also talk about oil demand out of China and give their opinion on the Fed's minutes. In addition, this Thursday will see the preferred measure of inflation - core PCE - released, and Friday is NFP Friday. Listen to these and more.

The Fed and BoE both hike by 75 bps but their tonality contrast with each other. RBA shows conservativeness, with central bank signs of slowing down in some regions. NFP leads to an odd market reaction and critical inflation data this Thursday. Into this mix, we also have the US mid-terms. All this and more.

The week FXCM market specialists Russ and Nik discuss the u-turn in PM Liz Truss's policies. Inflation remains rampant and sticky, with core CPI surprising to the upside. The terminal rate jumps to 5%, with the following two meetings for 2022 expected to hike at 75bps each. USDJPY reaches 32 years high, as central bank policies diverge. Please listen in for the above and more.

In this week's podcast, FXCM Senior Market Specialists Russ and Nik discuss the fallout from the UK's mini-budget. The two specialists also talk about jobs data and how that impacts the Fed's monetary policy in its battle to tame inflation. In addition, the environment increases in complexity with the Q3 earnings season kicking off this week. Join our specialists as they discuss these and more.

Last week's minibudget caused vast amounts of volatility in the Gilt market, with GBPUSD reacting. Finally, the BoE stepped in to calm markets. Since then, UK Chancellor Kwasi Kwarteng has backtracked on 45% tax rate cut. The core PCE in the US surprised to the upside at 4.9%, suggesting sticky inflation. This Friday, we will see the NFP numbers, with forecasts ranging between 250-265k, suggesting moderation in job numbers.

Last week's CPI numbers showed resilient inflation. This surprised markets and introduced 100bps as an option for the Fed. Join FXCM Market Specialists Russ and Nik as they discuss this, the new terminal rate, and the chances of the Fed overshooting. The two specialists also examine the yield inversion and discuss the BoJ's monetary policy. Please join us for these and more.

Fed chair Powell's speech led to a risk-off environment, as he outlined inflation as the primary policy driver. However, the Fed was not the only hawkish central bank, with tightening comments from the ECB. Moreover, the ECB minutes seemed to downplay a recession. This prompts Russ and Nik to discuss a general and potential contrarian overshoot scenario. NFP on Friday has forecasts between 285-295K, and Euro PMIs print on Thursday.

The NFP release was a big upside surprise. Unemployment dropped to 3.5%, and the economy created 528K jobs during July (vs 250K estimate). Expectations are now for another 75bps hike in September, with all eyes on today's CPI release. Last week saw both the RBA and BoE raise rates by 50bps, with the BoE's starling communication of 13% inflation by year-end and the onset of a recession. Friday sees UK GDP and University of Michigan consumer sentiment on the calendar, which will interest the market.

The Fed hiked rates by 75bps and cancelled forward guidance. GDP indicates a technical recession, and US inflation is still ticking at the highest level in 40 years. The Eurozone shows resilience but with savage inflation on its side of the pond. This week the BoE and RBA will hike rates, but there is scope for surprises. NFP Friday has a forecast of 250K jobs created in July. Yet, the tension between inflation and contraction lingers. We discuss all these and more in this week's podcast. 

Inflation is still in focus as the US printed at 9.1%  - the fastest pace since 1981. Bank of Canada surprises with 100bps to front load hikes due to inflationary concerns. Waller and Bullard talk down hike expectation to 75bps from 100bps. Fed funds rate has 75bps at 70% for 27 July hike. Bank earnings disappoint; this week, NFLX and Tesla kick off the tech side. Housing data is in focus on Tuesday, given Waller's comments. EU, UK and CAD CPI, UK employment data, plus a lot more in this week's podcast. 

NFP came in better than expected, albeit trending down. Other data hints at cracks forming in the job market. FXCM market specialists, Nik and Russ, discuss this further. The yield curve remains inverted and is in danger of steeper inversion as the Fed continues with its aggressiveness. Wednesday sees the CPI release, with markets forecasting a higher headline number than previous. RBNZ and BoC also feature on the calendar. Shifting expectations regarding the BoC's hike makes for a hot calendar item. This and more. 

Last week saw quarterly GDP contracts and PCE show signs of moderation. Moreover, manufacturing missed its forecast. All of a sudden, the narrative focuses on recession. Nik and Russ discuss if the Fed's focus will change in Q3. The RBA looks to deliver further hikes, and Wednesday sees the release of the FOMC's minutes from its June meeting.

This week FXCM senior market specialists Russ and Nik talk about inflation. First from the ECB's point of view and then moving to the US CPI miss on Friday. Market reactions were swift, which followed through to Monday. This Wednesday sees the Fed rate hike, and the market repricing from 50bps to 75bps had a large part to play in Monday's bloodbath. Thursday has the BoE hiking rates, with the market expecting 25bps. Finally, given the recent weakness in the large retailers' earnings, Wednesday's retail numbers will be interesting. All this and more.

Our senior market specialists, Nik and Russ, cover much ground this week. Several Fed officials make hawkish statements, with the NFP beat laying a foundation. Other central banks continue to be hawkish, with the BoC and the RBA hiking by 50bps. OPEC+ accelerated its schedule, but the oil market remains tight, and Boris Johnson survives a no-confident vote against him. Finally, the ECB meeting prepares the market for its hiking cycle, and Friday sees the next piece of the puzzle with US inflation scheduled for release. All this and more.

President Lagarde prepares the market for the ECB rate hike and Fed QT to start on 1 June. FOMC minutes reaffirm previous communications, with no unexpected concerns. OPEC+ meets as China lockdowns ease. Friday sees the release of NFP as the tightening cycle continues.

The Fed delivered a 50bps hike as expected, and the BoE statement makes a stagflation inference. RBA also raises rates in this uncertain economic environment. All eyes now turn to this week's CPI print in anticipation of moderation. 

BoJ diverges further away from Fed as it defends 25bps on its 10-year treasury. Core PCE moderates slightly, but employment costs are up. Advanced GDP stumbles to -1.4%contraction Q/Q. The RBA surprised with a 25bps hike, and the market looks to the Fed announcement on Wednesday for an expected 50bps hike and QT information. The market expects the BoE to raise rates by 25 bps, and Friday sees the NFP release.

Last Thursday, Fed Chair Powell hinted at a 50 bps hike for May. He also endorsed an acceleration in the raising of rates. Moreover, the market is preparing for these to be front-loaded over the next few meetings. The ECB is also growing more hawkish, and EU CPI came in at 7.2%. Twitter has agreed to Elon Musk's offer of $54.20 per share in a takeover, and this week will see the rest of the FAANG stocks, amongst others, report. The Fed's preferred inflation series, the PCE, will be released on Friday.

Our market specialists discuss inflation in this week's podcast, specifically PPI's influence on core CPI. The ECB confirms that its APP will conclude in Q3 and Elon Musk makes an unsolicited bid for Twitter. We also talk about USDJPY and its seven weeks of dramatic rise. This week has notable central bankers speaking at the spring meetings of the IMF, and it's an important week for earnings. 

The Fed has moved towards aggressive tightening, with a balance sheet reduction from May and possibly two consecutive 50bps hikes. Elon Musk takes a 9% stake in Twitter but doesn't take a board seat. CPI is forecast to be higher than last month's print, and RBNZ, BoC, and ECB will release statements this week. Finally, this week kicks off Q1 earnings. 

Friday's job report shows a robust labour market. Given last week's high core PCE reading, a 50bps hike in May is a strong possibility. Our analysts note the inverted yield curve and look forward to Wednesday's FOMC minutes. Finally, Bitcoin is showing signs of accumulation.

Russia's invasion of Ukraine has heightened the concern of stagflation. The price of oil, wheat and corn have risen significantly due to the supply shocks caused by the conflict. In this environment, central banks must navigate tighter monetary policy, with the Fed announcement on Wednesday. Markets will focus on Fed Chair Powell's press conference and the dot plots to gauge possibilities in this regard. 

As Friday closed for trading, imposed sanctions seemed underwhelming. This tone changed on Saturday as some Russian Banks were excluded from SWIFT, and the Russian central bank was sanctioned. Geopolitical risks intensify as Russia continues its invasion of Ukraine. Wednesday and Thursday, Fed Chair Jerome Powell testifies before the House Financial Services and Senate Banking Committees. The RBA will announce its cash rate on Tuesday with no change expected, and the BOC is expected to hike by 25bps on Wednesday. The end of the week sees the non-farm employment changes numbers on Friday.