{"id":139709,"date":"2019-01-06T20:57:56","date_gmt":"2019-01-07T01:57:56","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=139709"},"modified":"2019-01-06T20:57:56","modified_gmt":"2019-01-07T01:57:56","slug":"the-trade-week-ahead-one-last-time","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/01\/the-trade-week-ahead-one-last-time\/","title":{"rendered":"The Trade Week Ahead \u2013 One Last Time"},"content":{"rendered":"<div id=\"inves-4013030561\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">January 6, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><div class=\"section-header\">\n<p><strong>By Evan Lucas,\u00a0<a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener\">FPMarkets.com<\/a> <\/strong><\/p>\n<\/div>\n<p><iframe loading=\"lazy\" id=\"_dytid_2622\" src=\"https:\/\/www.youtube.com\/embed\/A_qAYAU3BG4\" width=\"765\" height=\"564\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><br \/>\nThe final full week of trading and final \u2018the trading week ahead\u2019 for 2018 this week, what a week to finish on \u2013 three of the top five largest central banks are meeting for the final time this year and will not meet again until February 2019.<\/p>\n<p>The banks are The Bank of England, the Bank of Japan and the one that will impact markets the most over the coming 12 months the US Federal Reserve. Neither the BoE or BoJ are forecasted to move rates this week, the Fed, however, is, that isn\u2019t what the market is likely to react too; it\u2019s the economic forecasts and the future projections of the Federal Funds rate that will get the USD moving around.s<\/p>\n<p>Over the past two and a half months, perma-bears would have us believe something in the US and the global economy has fundamentally changed \u2013 \u201cgrowth is ending; a recession is coming\u201d.<\/p>\n<p>Their justification for this stance is reflected in this chart<br \/>\n<img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-18730\" src=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2018\/12\/1234-550x367.png\" alt=\"\" width=\"768\" height=\"564\" \/><br \/>\nThe \u2018kinked\u2019 curve (the inversion between the 2-year and 5-year bond) \u2013 is a strong inflection point recession watchers. It\u2019s the first time in nearly 6 years the 2yr-5yr spread has inverted the last time was the lead up to the Euro crisis \u2013 the idea is recession risk is coming.<\/p>\n<p>The larger recession indicator, however, is the 2yr and 10yr spread inversion when this inverts a recession is coming according to history. Over the past 40 years, every time the 2-10yr inverts a US recession precedes it in the coming 18 months.<\/p>\n<p>Note; however, the 2-10 hasn\u2019t inverted yet but at 15 basis points it\u2019s so close you can touch it and a further 25 basis point rise on Thursday could push the spread over the line.<\/p><div id=\"inves-2267482624\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>That does beg the question, will the spreads in the bond and corporate debt markets make the \u2018data dependent\u2019 Fed pause in 2019? Is rate hike trajectory about to ease? It will make the dot plot releases all the more interesting \u2013 and it will make DXY the biggest mover and shaker on a trade front this week.<br \/>\n<img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-18731\" src=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2018\/12\/321-550x374.png\" alt=\"\" width=\"768\" height=\"564\" \/><br \/>\nThis Thursday\u2019s meeting is a lock for the 25bp rise based on the communication over the past 2 months here is a sample of the Board (all these are voting members)<\/p>\n<p>\u2022 Chairman Jerome Powell: \u201cInterest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy \u2014 that is, neither speeding up nor slowing down growth.\u201d From a Nov. 28 speech<\/p>\n<p>\u2022 Vice Chairman Richard Clarida: \u201cWe\u2019re at a point now where we really need to be especially data dependent. The economy is doing well. We\u2019re looking for signals from the labor market, from inflation, to get a sense of both the pace and the destination for policy.\u201d Interview on CNBC on Nov. 16<\/p>\n<p>\u2022 New York Fed President John Williams: \u201cI do expect further gradual increases in interest rates will best sponsor a sustained economic expansion.\u201d Press conference on Dec. 4.<\/p>\n<p>Vice Chairman Clarida is interesting \u2013 it\u2019s the slight dovishness in the \u2018especially\u2019 that may give a hint to Thursday\u2019s press conference \u2013 any signs of a pause or a slightly less hawkish Fed will drag on the USD and could mark the start of its moderation in 2019.<\/p>\n<p><strong>Article by <\/strong><a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener\"><strong>FPMarkets.com<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Evan Lucas,\u00a0FPMarkets.com The final full week of trading and final \u2018the trading week ahead\u2019 for 2018 this week, what a week to finish on \u2013 three of the top five largest central banks are meeting for the final time this year and will not meet again until February 2019. The banks are The Bank [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-139709","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=139709"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139709\/revisions"}],"predecessor-version":[{"id":139710,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/139709\/revisions\/139710"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=139709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=139709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=139709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}