Mayday, Mayday, don't be alarmed but there is a Fed Meeting today. Europe and China have public holidays and liquidity will be thin so what are we expecting? Luckily 'no change' is expected to Fed Funds rate, but all eyes will be on Fed Chair Powell’s press conference for signs of a hawkish pivot. Opinion polls suggest that Donald Trump will win the US presidential election in November, he has warned of a possible 10% universal trade tariff and potentially a tariff 60% on Chinese imports - this is inflationary. The WSJ reported that some Trump advisors are arguing that the president should be consulted on interest rate decisions, if the Fed’s credibility were undermined then Jay Powell might lean to a hawkish pivot earlier.
Overnight US equity markets were buoyed by Amazon's cloud unit posting the strongest sales growth in a year, a sign that the retailer’s most profitable unit is recovering from a slump. There was a first-quarter operating profit of $15.3 billion and revenue increased 13% to $143.3 billion. In other markets Bitcoin is below the $60,000 support at $59,925.11, the yield on 10-year Treasuries was little changed at 4.68%, West Texas Intermediate crude fell 1% to $81.15 a barrel, Spot gold is at $2288 per ounce. USDJPY edges up to 158 and Caable opens at 1.2475.
Data wise the focus is the US, we have the ADP employment change, and JOLTS job openings, MBA mortgage applications and the results of the April ISM survey. Most importantly the Federal Reserve rate decision at 7pm followed by the press conference at 7.30. Have a great May and don't forget the old expression 'Sell in May and Go Away'...
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