{"id":149185,"date":"2019-06-07T12:13:59","date_gmt":"2019-06-07T16:13:59","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=149185"},"modified":"2019-06-07T12:13:59","modified_gmt":"2019-06-07T16:13:59","slug":"the-week-ahead-friday-07th-june-2019-currency-point-refocusing-usd","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/06\/the-week-ahead-friday-07th-june-2019-currency-point-refocusing-usd\/","title":{"rendered":"The Week Ahead: Friday 07th June 2019 \u2013 Currency Point: refocusing \u2013 USD"},"content":{"rendered":"<div id=\"inves-3482112818\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">June 7, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Evan Lucas, <a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">FPMarkets.com<\/a><\/strong><\/p>\n<div class=\"section-header\">\n<h3>Currency Point: refocusing \u2013 USD<\/h3>\n<\/div>\n<p><iframe loading=\"lazy\" id=\"_dytid_7096\" src=\"https:\/\/www.youtube.com\/embed\/Un340dh_J5w\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>The material refocusing of all markets, not just FX, on Constitution Avenue has been astonishing to see.<\/p>\n<p>The rising risk of recession, global slowdowns and geopolitical fall outs have seen the US \u2018recession marker\u2019 in the 3mT bill-US10yr differential flashing red.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-20809\" src=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-545x410.jpg\" sizes=\"auto, (max-width: 545px) 100vw, 545px\" srcset=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-545x410.jpg 545w, https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19.jpg 609w\" alt=\"\" width=\"545\" height=\"410\" \/><\/p>\n<p>Since 1900 when this differential inverts, it has forecasted a US recession in the preceding 18-24 months over 95% of the time. Now I should point out that the US currently has some of the best employment figures since the 60\u2019s and its overall \u2018wealth\u2019 metrics are booming.<\/p>\n<p>But, you can\u2019t ignore the \u2018sign\u2019.<\/p>\n<p>What this all means is the Fed is (amazingly) \u2018in play\u2019 and markets are telling us so.<\/p><div id=\"inves-1820900192\" 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><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-20810\" src=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-1-540x410.jpg\" sizes=\"auto, (max-width: 540px) 100vw, 540px\" srcset=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-1-540x410.jpg 540w, https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-1.jpg 609w\" alt=\"\" width=\"540\" height=\"410\" \/><\/p>\n<p>Pricing clearly shows that in the coming 12 months the market now expects the Federal Reserve to cut the Federal Funds rate at least twice, with a full 25 basis points now expected to come out by no later than September.<\/p>\n<p>What is so interesting about these developments is that although bond markets are pricing a dovish Fed, the USD has not.<\/p>\n<p>Thus, there are 2 scenarios to watch for that should start to weigh on the USD:<\/p>\n<p>First would be the increasing volume of Fed speakers coming out in favour of discussing rate cuts (they don\u2019t necessarily need to act, jawboning will be enough).<\/p>\n<p><a href=\"http:\/\/go.fpmarkets.com\/visit\/?bta=35137&amp;nci=5462\" target=\"_Top\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/fpmarkets.ck-cdn.com\/tn\/serve\/?cid=361646\" width=\"728\" height=\"90\" border=\"0\" \/><\/a><\/p>\n<p>Second would be explicit guidance and\/or thresholds that would lead to a rate cut. I would suggest keeping a sharp eye on Vice Chair Richard Clarida.<\/p>\n<p>The Fed enters the \u2018blackout\u2019 period this week head of next week\u2019s FOMC meeting so these points will have to wait. But, June is a press conference meeting and Chair Powell will thus update the Board\u2019s forecasts in the Summary of Economic Projections so the first chance to review the above scenarios will come from the most senior member of the board.<\/p>\n<p>The FOMOC meeting will also see the Fed releasing its latest dot plots here are the March projections.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-20811\" src=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-2-544x410.jpg\" sizes=\"auto, (max-width: 544px) 100vw, 544px\" srcset=\"https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-2-544x410.jpg 544w, https:\/\/www.fpmarkets.com\/wp-content\/uploads\/2019\/06\/WA-07.06.19-2.jpg 608w\" alt=\"\" width=\"544\" height=\"410\" \/><\/p>\n<p>If the FOMC projections follow the Fed fund futures (purple line) and suggest that the Fed\u2019s base case is for rate cuts in 2019, this, coupled with Powell\u2019s press conference will trigger USD weakness not seen in months. Pairs will shoot around so be prepared.<\/p>\n<p><strong>By Evan Lucas, <a href=\"https:\/\/www.fpmarkets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">FPMarkets.com<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Evan Lucas, FPMarkets.com Currency Point: refocusing \u2013 USD The material refocusing of all markets, not just FX, on Constitution Avenue has been astonishing to see. The rising risk of recession, global slowdowns and geopolitical fall outs have seen the US \u2018recession marker\u2019 in the 3mT bill-US10yr differential flashing red. Since 1900 when this differential [&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-149185","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149185","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=149185"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149185\/revisions"}],"predecessor-version":[{"id":149186,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149185\/revisions\/149186"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=149185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=149185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=149185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}