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Morgan Stanley: It is currently expected that the Federal Reserve will not cut interest rates in 2025, while it was previously expected to cut interest rates by 25 basis points in June.Crude oil futures are erasing gains from recent weeks as the rollout of Trump’s “reciprocal tariffs” looks worse than many expected, raising concerns that it will slow the global economy and oil demand. “U.S. consumers are in a tough spot, and overseas manufacturers are in the same boat, which is bad for demand in an already troubled environment,” TP ICAP’s Scott Shelton said in a report.U.S. imports in February were $401.1 billion, compared with $401.2 billion in the previous month.U.S. exports in February were $278.5 billion, compared with $269.8 billion in the previous month.On April 3, Melanie Debono, a macro analyst at Panson, said that Switzerlands future inflation trend may depend on the countrys retaliatory measures against US tariffs. The Trump administration imposes a uniform tariff of 31% on all goods imported from Switzerland, which will have a suppressive effect on inflation if it seriously affects economic growth by hitting exports and investment. The United States may still impose tariffs on Switzerlands main export products, medicines, but so far, the United States has not imposed tariffs on Swiss medicines. But Debono pointed out that a major retaliation from Switzerland would mean that imported inflation would rise more than currently expected. Switzerland currently does not impose tariffs on manufactured goods, so the United States does not either. The United States reciprocal tariffs are partly because it believes that Switzerland is a currency manipulator.

Forecast for the price of gold: XAU/USD fluctuates around $1,810 as attention turns to Fed policy

Daniel Rogers

Dec 14, 2022 11:26

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In the Tokyo session, the spot price of gold (XAU/USD) is fluctuating around the $1,810.00 immediate support. The price of the precious metal dropped after hitting a new five-month high on Tuesday at $1,824.51. After the publication of a moderate inflation report for the month of November, the price of gold was given new life.

 

As prospects of a lesser rate hike by the Fed have grown due to a decrease in inflationary pressures, the US Dollar Index (DXY) is battling to maintain above the 104.00 level. Following the weak October inflation report, Fed policymakers were already calling for a slowdown in the rate of interest rate increases. Recent major slowdowns in inflation have increased the likelihood of changing the monetary policy to one that is less hawkish.

 

After a decrease in pricing pressures, the risk-appetite theme boosted the S&P 500. Futures for the 500-US stock basket are anticipated to increase in speed as recession concerns have diminished more. Additionally, the 10-year US Treasury yields are now close to 3.50 percent.

 

"The 50 basis points raise, which is commonly predicted for tomorrow's FOMC meeting, can be considered almost certain given today's data," states a Commerzbank note. We continue to believe that the Fed will cut back on the extent of the rate increases once more at the start of 2023, increasing rates by only 25 basis points in February and March.

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