On April 25, Quincy Krosby, chief global strategist at LPL Financial, said: “When interest rates start to climb, adjustments have to be made.
\”The calculus has changed, so the question is, if interest rates stay higher for longer, will we have a problem?\” ” Recent statements from Fed Chairman Jerome Powell and other policymakers have solidified the view that interest rates will not be cut in the coming months.
In fact, there is even talk of another rate hike or two in the future if inflation does not ease further.
That leaves many questions: when exactly will monetary policy ease, and what impact will the central bank\’s unchanged stance have on financial markets and the economy as a whole.
Krosby said some answers will soon be revealed as the current earnings season heats up.
Company executives will provide key details beyond sales and profits, including the impact of interest rates on margins and consumer behavior.
He said: \”If there is any indication that businesses are going to have to start cutting costs, causing problems in the job market, then that\’s a potentially problematic path with interest rates so high.
\”In addition, a former senior Japanese foreign exchange official said that if the yen depreciates further, Japan will be on the verge of intervening in the currency market.
\”With no change in U.S. and Japanese interest rates, the yen has depreciated quite rapidly against the U.S. dollar,\” Mitsuhiro Furusawa, a former finance ministry vice minister for international affairs, said on Tuesday.
\”If this trend continues, there will be intervention,\” Furusawa said.
” and added: “We are very close.
He noted that market reaction to U.S. economic data could be a factor prompting Japanese authorities to take action.
He also noted that a joint statement issued last week by Japan, the United States and South Korea indicated that Japan\’s allies would not block Japan\’s access to the market.
The former Finance Ministry official\’s comments came as the dollar approached a 34-year low of 154.871 yen.
Japanese Finance Minister Shunichi Suzuki said earlier in the day that relevant authorities are ready to take action to deal with the situation.
The data that need attention today include Germany’s Gfk consumer confidence index in May, the UK’s April CBI retail sales difference, the initial value of the annualized quarterly rate of real GDP in the first quarter of the United States, and the quarterly rate of the implicit GDP deflator in the first quarter of the United States. , the number of initial jobless claims in the United States for the week ending April 20 and the monthly rate of the seasonally adjusted existing home contract sales index in the United States in March.
Gold/USD Gold fluctuated and consolidated yesterday, with the daily line closing slightly lower, and the current exchange rate trading around 2320.
In addition to the warming risk sentiment in the market, which has suppressed the safe-haven demand for gold, which continues to weigh on gold, the reduction in expectations of an interest rate cut by the Federal Reserve within the year and even the expectation of an interest rate hike are also important factors that put pressure on gold\’s decline.
In addition, the U.S. dollar index rebounded and closed higher, which also put some pressure on gold.
Today, focus on the pressure situation near 2340, with the lower support near 2300.
USD/JPY USD/JPY fluctuated upward yesterday, breaking through the 155.00 mark, and the current exchange rate is trading around 155.60.
In addition to the rise of the US dollar index supported by good economic data and other positive factors, which has provided certain support to the exchange rate, after the exchange rate broke through the pressure of 155.00, it attracted the intervention of some technical buyers, which also provided certain support to the exchange rate.
However, concerns about the Bank of Japan\’s intervention in the currency market have limited the upside potential of the exchange rate.
Today, we will pay attention to the pressure near 156.50, with the lower support near 154.50.
USD/CAD USD/CAD fluctuated upward yesterday, closing slightly on the daily line, with the current exchange rate trading around 1.3690.
In addition to the short covering that has provided certain support to the exchange rate, the rise of the U.S. dollar index, supported by short covering and good economic data, has also provided certain support to the exchange rate.
In addition, the decline in crude oil prices and Canada\’s weak economic data during the period also provided certain support for the exchange rate.
Today, we will pay attention to the pressure situation near 1.3800, with the lower support near 1.3600.
