TCA and fair execution.
The metrics that
the FX industry must use.
DOWNLOAD
We haven’t seen much change in FX markets since the week got going and we talked about a lighter Monday calendar and positioning into today’s US event risk accounting for the directionless trade. Interestingly enough, US equities haven’t stopped doing their thing, continuing to extend their run of record highs. read report
As we come into the new week, there has been a clear storyline of western markets reconsidering 2024 rate cut bets. In the US, year-end fed funds are now sitting up at 4.2% from 3.65% last month. read report
The big takeaway this week is the striking disconnect between the messages we’re getting and the market’s response. By most indications, economic data and central bank speak have backed up the case for a less accommodative Fed rate cut path than what the market has been pricing. read report
The Fed has been quite vocal about pushing back on the need for imminent rate cuts. At the same time, the threat of regional bank contagion has been getting a little more attention. And yet, we continue to see investors dismissing any signs that might have stocks and risk assets wanting to go lower. read report
We’ve been in a period of consolidation over the past 24 hours. Financial markets are taking a breather after making adjustments in the aftermath of last week’s less dovish Fed communication and strong jobs report. read report
The market is still mostly hung up on shifting Fed rate expectations in the aftermath of last week’s Fed decision and US jobs report. We’re also coming out of a Monday session that produced some mixed results on the US earnings front, which perhaps caused more reason for concern. read report
We had warned the market was getting ahead of itself with respect to aggressive rate cut pricing. And in recent sessions, this warning has proven to be true. First it was the Fed’s decision in the previous week, in which the central was less dovish than what the market was looking for. read report
The week is set to close out and the big takeaway is that the market continues to see what it wants to see, despite actual signs that would argue otherwise. Key standouts on Friday’s calendar come from the monthly employment report out of the US, US factory orders, and Michigan sentiment. read report
In our Wednesday special report previewing the Fed decision, we warned the balance of risk tilted towards risk off flow. We highlighted the fact that while the Fed did come closer to the market at the December meeting, there was still a clear disconnect. read report
We suspect activity in financial markets will pick up today, with a good deal of economic data on the calendar ahead of the feature event in the form of the Fed policy decision late in the day. At the moment, things have been rather tame. read report
