- May 3, 2018
- Posted by: Joey Benedid
- Category: Market News
The dollar has pulled back slightly following a solid run where we saw four month highs on the dollar index. Investors were looking to cash in following the Fed Rate Decision yesterday where the Fed added little in terms of new information to their outlook. The word symmetric was used twice in reference to their inflation targets, meaning that the Fed is not going to panic about reaching their 2% inflationary targets. The 10-year treasury note yields dropped to 2.4% after hovering in and around 3% range in the days leading up to the announcement. Treasury Secretary Mnuchin and co. arrived in China for trade talks. The Chinese have said that they won’t accept any pre-conditions and will not be bullied into striking a deal. There are concerns that the trip could end early without a deal struck. Theresa May has run into more complications as pro-Brexit ministers rejected her proposal for a compromise in which Britain would have access to the EU’s customs systems. The UK sector service picked up slight for April, but not enough for the BoE to reverse its cautious sentiment regarding a rate hike this summer.
Eurozone CPI was released earlier this morning, missing expectations by 0.2%. Later this morning we have US ISM Non-Manufacturing/Services Composite (58.0 vs 58.8) which is the only remaining primary release for the day. All eyes will be on jobs numbers tomorrow out of the US to round out the week. Short term support and resistance remain at 1.2750 and 1.2900 respectively as we continue to trade within range, with RSI remaining neutral and the 200-day moving average residing at 1.2670.