The US dollar and Treasuries exhibited minimal movement during the Asian trading session. The release of varied US economic data on Friday has sparked concerns that the Federal Reserve may adopt a more patient approach towards the pace of interest-rate cuts in its upcoming policy decision announcement on Wednesday.
Anticipation surrounds the Federal Reserve’s meeting this week, with market expectations leaning towards the status quo in terms of policy changes. While discussions regarding the potential slowdown and eventual cessation of Quantitative Tightening are anticipated, analysts believe it is premature to announce any modifications at this juncture. Risks for the dollar appear tilted to the upside this week, with the possibility of Fed funds future pricing aligning with the FOMC’s projections.
The week ahead promises a deluge of pivotal data points. On Tuesday, attention will be on European GDP figures, followed by China’s PMI and Australian inflation on Wednesday. Subsequently, Thursday will witness the release of European inflation data and a crucial policy decision from the Bank of England.