Known FED, Unkown Expectations!
Most Fed watching these days surrounds the never-ending and unknowable—future monetary moves.
Constant flipping between unrealistic dovish market expectation & hawkish Fed speak - With war drums louder than ever, the supply chain issues hit the front page -no one even now expects resurgence of inflation.
Thinking of Powell and FOMC and, one is reminded of Captain Chesley Sullenberger, the pilot who landed a U.S. Airways jet in New York's Hudson River that resulted in all 155 people aboard surviving; national transportation safety board later found out that landing in the river was the only safe option; but no one in their true sense would ever expect such outcome - moral of the story is that one should never be dismissive of even such a remote possibility.
Lot of GDP releases in Europe - numbers could show Germany & Europe in technical recession. Bad news indeed seen as bad now - Centeno shrugged off idea of ECB waiting for Q1 wage growth. Kazimir pulled in the reins, claiming rate cut talk remains ‘premature’. As expected EURUSD tested support 1.0793 50% of the Oct/Dec rise. 1.0800 -1.0850 for now.
Debt to GDP climbs to record high - macro leverage (outstanding non-financial debt to nominal GDP) at 287.8% (13.5% higher than previous) - no scope for any fiscal stimulus- tough days ahead but corporate western media is trying hard to keep the strong Chinese economy narrative alive.
Northern Ireland's DUP strikes a deal to return to power-sharing govt. BoE to drop the pretence that it could hike rates again and to continue asserting that rates will stay restrictive for an "extended period".
GBP/USD consolidation 1.2630 1.2730
Kishida: Will do ‘everything possible’ to bolster household income - indirectly saying "don’t ask for rate hike"- Close above 149.17, 76.4% of Nov-Dec dive, key for hitting 151.93.