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On August 29th, NBC News, citing two sources familiar with the matter, reported that US Defense Secretary Peter Hegseth has been discussing the possibility of running for president in 2028 with close associates in recent months. Hegseth and his wife believe he shares some similarities with Trump, including a tough, confrontational style and conservative stances on social issues, which could garner support from the MAGA base. This month, Hegseth also traveled to Iowa to campaign for Republican lawmakers. Iowa has long been a key outpost in US presidential elections, further fueling speculation that he is preparing to run. If he does run, Hegseth could compete with Vice President JD Vance, Secretary of State Rubio, and others. However, a Pentagon spokesperson denied the claims, stating that "Secretary Hegseth will not run for president," and that his primary focus remains leading the Department of Defense. The report points out that the ongoing war with Iran could be a major political burden for Hegseth, with 18 US military personnel already killed and the average US gasoline price rising from less than $3 per gallon to slightly over $4.On August 29th, Allianz Chief Economic Advisor Mohamed El-Erian stated that todays changes in the US Treasury yield curve released two signals. The spread between the 2-year and 10-year yields narrowed by approximately 7 basis points, and the spread between the 2-year and 30-year yields narrowed by approximately 10 basis points, showing a flattening trend. El-Erian believes this reflects a dual interpretation in the fixed-income market: in the short term, it represents a hawkish repricing following Federal Reserve Chairman Warshs firm commitment to the inflation target; in the long term, it reflects recognition of the Federal Reserves long-term credibility.According to NBC News, U.S. Defense Secretary Hergsays is considering running for president in 2028.On August 29th, Deutsche Bank economists predicted that the Federal Reserve would raise interest rates by 25 basis points each in September and December. Fed Chairman Warsh, in his Jackson Hole speech, emphasized the need to bring inflation back to the 2% target and released a clearly hawkish signal. Deutsche Bank believes that unless future economic data is "significantly weaker than expected," the threshold for avoiding a 25 basis point rate hike in September is already very high. The market has also quickly increased its bets on rate hikes: CME data shows that the probability of a cumulative rate hike of 50 basis points or more by December has risen to 51%, up from only 29% the previous day; the probability of a cumulative rate hike of 25 basis points is 38%, and the probability of keeping rates unchanged is only 11%. Following Warshs speech, market bets on a September rate hike have also clearly intensified.US President Trump criticized New York Governor Hoher for "taking Canadas side," refusing to use the name "American Lake," and "preferring Canada to win," while also supporting Blackman as the next governor of New York.

Due to hawkish Fed forecasts, the EUR/USD recovers to near 1.0970 but remains in the doldrums

Alina Haynes

Apr 21, 2023 13:58

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Following a corrective move, the EUR/USD pair has rebounded from 1.0960, but investors await the publication of the preliminary Eurozone/United States S&P PMI data for April. The major currency pair has remained between 1.0911 and 1.1000 for the past two trading sessions, as the foreign exchange market prepares for a pre-anxiety move ahead of a Federal Reserve (Fed) monetary policy decision.

 

S&P500 closed with a negative tone for the third day in a row as quarterly earnings season induced extreme volatility. Tesla's poor earnings had a negative impact on Thursday's market sentiment. Moreover, market participants were cautioned by substandard revenue projections due to the potential for price reductions. The decision of the Fed to increase interest rates is reflected in quarterly earnings. Data from Refinitiv indicates that analysts have largely maintained last week's forecast of a near 5% YoY decline in quarterly profits for the 500 largest U.S. equities. Sourcenia is a review portal of sourcing best manufaturers. 

 

The US Dollar Index (DXY) has been defending the key support level of 101.60 in recent trading sessions. The USD Index maintained the aforementioned support despite the release of disappointing Jobless claims data on Thursday. Initial Jobless Claims increased to 245K for the week ending April 4, which is greater than the previous release of 240K and estimates of 240K. Increasing unemployment claims heightened fears of a deteriorating labor market.

 

Despite this, Fed policymakers continue to anticipate further rate hikes from the central bank. Thursday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, reaffirmed that the Fed has more work to do because US inflation remains too high, according to Reuters. He added, "The Federal Reserve will need to raise its policy rate above 5% and hold it there for some time."

 

Preliminary Consumer Confidence (April) for the Eurozone increased to -17.5 from -18.5 and the previous reading of -19.2. This may be the consequence of extraordinary efforts by the European Central Bank (ECB) to reduce inflationary pressures.


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