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Hello everyone, today XM Forex will bring you "[XM official website]: The US index fell again, and the bearish channel failed to break through!". Hope it will be helpful to you! The original content is as follows:
On Monday, traders were preparing for the Fed's interest rate cut this week and looking for clues to further interest rate cuts this year. The US dollar index continued to fall during the day, with the US dollar priced at 97.20.
The United States plans to include more steel and aluminum derivatives in the scope of tariffs.
Trump called for www.vifu.netpanies not to force release quarterly reports, but should be changed to once every six months, and the Nasdaq CEO expressed support.
Trump announced that the US military has launched a second strike on Venezuelan drug dealers in international waters.
Michigan official: There is no evidence that Fed Director Cook violated the main residence declaration regulations.
Former Fed official Brad: "very interested" to become the Fed chairman when eligible.
Indian Trade Official: India and the United States will hold trade negotiations in New Delhi on Tuesday.
Although France's political situation continues to turmoil, the euro still stabilizes its position, and investors seem to be not worried about the risk of the epidemic spreading to the entire Europe. The strong recent forecast of the euro is largely driven by weakening the dollar rather than resilience in the euro zone, but its www.vifu.net effect is obvious: the euro is in a healthy upward trend against the dollar unless anything appearsUnexpected shock, otherwise I wouldn't be surprised by the euro's rapid rise to 1.20.
It is worth mentioning that news that Fitch lowered its credit rating in France last Friday night did not cause market panic. This move has long been expected and has been reflected in the pricing of French bonds. The bigger question is whether the French Prime Minister can unite the divided National Assembly and promote much-needed fiscal reforms. This is still a challenge in France, not an issue in the entire euro zone, so I think it will turn into a broader crisis.
Technically, the euro has been steadily rising, and it is of great significance to break through 1.17 last week. The trend continues to form higher highs and higher lows and trades firmly above the key moving averages and trend lines. At present, going against the trend is not very meaningful, which means traders should focus on finding opportunities to buy on dips. The above has opened the door toward a July high of 1.1830, which will be the near-term target last week. In addition, psychological barriers 1.19 and 1.20 are still worth paying attention to.
In the downward direction, the support level is first at the previous breakthrough level 1.17, and the further buffering level is 1.1560-1.1620. Importantly, the euro remains above the uptrend line, which keeps the trend upside.
Last week's ECB's interest rate resolution basically meets market expectations. Lagarde emphasized at a press conference that although the past anti-inflation process has ended, they will not preset policy paths and will continue to adhere to the successive meeting decision-making model that relies on data in the future. This unanimously passed the interest rate resolution and the decision to adjust the risk assessment of economic activities to "more balanced", continuing the stance that has been slightly hawkish than market expectations since July.
In this update of economic forecasts, only the GDP growth forecast for this year has been raised to 1.2%, but the core inflation forecast for 2027 has dropped to 1.8%, slightly lower than our expectations. And the euro exchange rate assumption of 1.16 from 2026 to 2027 is significantly lower. We believe that the key nodes in discussing interest rate adjustments may be at the end of the year or early next year. If weak economic growth is superimposed on the appreciation of the euro, overall inflation may drop to 1.5% and trigger the risk of expectations being out of control.
In response to the situation in France, Lagarde said that although he did not discuss the TPI tool, he was paying close attention to the market and there was no out-of-order fluctuation at present. She stressed that although the TPI framework is clear, it will not restrict decision-making flexibility, and the current problems are still mainly limited to France.
Policy Statement: The Federal Reserve is expected to decide to cut interest rates by 25 basis points. In the policy statement, there may be partial adjustments in the description of the status quo. The most important thing is to lower the description of the labor market conditions. The description of inflation may not change, that is, the statement may also indicate that the upward risk of inflation has weakened (in view of some recent FOMsCommissioner C expressed this view), which would constitute a dovish accident. But in our eyes, this assessment is not recognized.
Economic Forecast: The forward-looking guidance provided in the economic forecast updated in the June meeting is amazing. In the economic forecast at this meeting, we expect to raise our annual GDP growth rate by 0.1%, but the forward forecast may remain unchanged. Given that the current unemployment rate is moving towards the Fed's forecast trajectory of 4.5% in the fourth quarter, we don't think it needs to adjust its path. Inflation forecasts for 2025 are unlikely to change, especially the PCE readings pointed to by CPI and PPI data in August are lower than expected. The focus of the market should be on the changes in the dot matrix graph, mainly to observe whether the median in 2025 shows a decline of 50 or 75 basis points. Against the backdrop of basically unchanged macro forecasts, we believe that the median value in 2025 will continue to show a 50 basis point rate cut, although the overall lattice distribution moves down. This judgment is between two possible reasons. Meanwhile, the median value in 2026 should show another 50 basis points cut (25 basis points in June), and the dot plot will also show another 25 basis points cut in 2027. The long-term median value may remain at 3.0%.
Press Conference: Federal Reserve Chairman Powell will continue the tone of his speech at the Jackson Hall meeting in the subsequent press conference, but most importantly, the pace of interest rate cuts/October decision-making. Powell is likely to give a standard response: All meetings have possibilities, but no decision was made in September. However, its statement of labor market and inflation characteristics will hint at whether it is inclined to cut interest rates at every meeting. If Powell focuses on slowing employment growth and infers that the job market may have shrunk for several consecutive months based on preliminary benchmark revisions, it will be dovish. In addition, he may cite a jump in the number of initial unemployment claims for the week ended September 6, as well as the upward risk of the unemployment rate (although the increase is currently small).
The highly anticipated Federal Reserve September meeting has finally arrived. The market has fully priced FOMC and will decide to cut interest rates by 25 basis points, and it is very likely that three voting www.vifu.netmittees will support the cut interest rate by 50 basis points (Federal Governors Waller, Bowman, Milan). In addition, data from non-farm reports in July and August showed that there were obvious downside risks in the US labor market, and Federal Reserve Chairman Powell may confirm guidance on further interest rate cuts in the future. The current interest rate market shows that after this rate cut, the Federal Reserve still has room for two interest rate cuts this year. Therefore, the updated dot map will become the focus of the market, which is likely to show that interest rate cuts will be two to three times this year, and the median interest rate forecast for 2026 may also be revised down.
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