Today’s Key Market Drivers: 26th June 2019
Fed’s Bullard says two rate cuts would be overdoing it.
Fed committee members Bullard told the press on Tuesday that he believes a 0.50% cut or two drops in the official cash rate in coming months would be overdoing it. Both he and Fed Chairman Jerome Powell have confirmed a rate cut is likely next month however further cut at this stage would need to be data dependent.
US stocks have been rallying recently and turned on their heels and headed back lower as any comments about a floor in the US Fed’s official cash rate will mean stocks retreat. Traders are expecting the Fed to drop rates twice and today’s statement that perhaps only one rate cut would be necessary was met with a negative on Wall Street.
Please keep the following in mind. Higher interest rates are positive for the US Dollar and negative for stocks. Lower interest rates are negative for the US Dollar and positive for stocks.
US Consumer Confidence losing momentum.
The latest US Consumer Confidence numbers showed a weaker number than economists expected and whilst Bullard and Powell are only giving away a 0.25% rate cut in coming months if the economic data continues to remain weak the Fed may be forced to cut the cash rate more than once prior to Xmas.
Today sees the latest Durable Goods and Trade Balance numbers and whilst the US Dollar didn’t fall out of bed on Tuesday a further slide lower would highly likely occur if both of the High impacting data numbers today disappoint.
RBNZ cash rate decision due at midday AEST today.
The RBNZ is widely tipped to keep the official cash rate on hold when it delivers its June statement today. GDP figures last week beat market estimates and whilst a further rate cut is still on the cards in coming months the expectation is that June’s statement will see the cash rate remain at 1.5%. The statement is set for release at midday so expect to see plenty of volatility on the Kiwi Dollar today.
Be nice for no reason.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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