US Downgrade Will Focus Attention on Other Countries

Fitch Ratings unexpectedly cut the US long-term credit rating by one notch to AA+. In response, markets have begun a gradual but broader risk repricing.

Sunset Market Commentary

The countdown to a Fed decision most often is a long-drawn yawn with eco data often ignored. Today, even these ’to be ignored‘ data were almost completely absent. US new home sales, to be published after finishing this report for sure won’t break the stalemate. Uncertainty on growth and how much further tightening still to expect from the Fed and the ECB combined with mixed results caused equity investors to stay at bay.

Crypto Market Poised to Move

Bitcoin stuck to its 50-day moving average, trading just above $29.1K. One of the following sharp moves could stop the recent mini-lull, determining the future trend.

USD/JPY Softens as Yen Hedges Surge Ahead of BOJ

The Japanese yen is catching modest bids here as stocks soften on Microsoft’s disappointing AI outlook and as pressure builds for the BOJ to tighten.

Too Dovish Market Expectations from FOMC?

After pausing at the last meeting, the Fed will announce its rate decision today with a widely expected 25-point hike to a range of 5.25%-5.50%. This event is 97% priced into interest rate futures, according to the FedWatch tool, and the main intrigue lies in the clues as to the Fed’s next moves. And there is plenty of room for speculation.

FOMC Hikes Again, Signals More May Be Needed

The Federal Reserve Open Market Committee (FOMC) hiked the federal funds rate to the 5.25% to 5.50% range and announced a continuation of its balance sheet runoff. 

FOMC Goes for a Summer Hike

The FOMC raised its target range for the fed funds rate by 25 bps today. The move was widely expected by financial markets and economists. The Committee has hiked its policy rate by 525 bps since March 2022.

Fed Review: Balancing Act With Focus on Data

The Fed delivered the widely anticipated 25bp hike in the July meeting while keeping the door open for further hikes. That said, Powell carefully refrained from pre-committing to any future policy actions.

FOMC to Assess Policy One Meeting at a Time

With the downside risks to growth now believed to be as significant as inflation’s potential upside, the FOMC are beginning to look beyond the tightening cycle.

ECB Policy Meeting to Large Extent Might Follow Scrip of Fed Meeting

Later today, the ECB policy meeting to a large extent might follow the scrip of yesterday’s Fed meeting. Anything different from a 25 bps hike would be a huge surprise. At the ECB press conference, chair Lagarde probably will get many questions on recent poor activity data.