What to Expect the Last Two Trading Days of the Week
By Mark O’Brien, Senior Broker
General: albeit the eighth straight interest rate hike by the Federal Reserve since last March, today’s 25-basis point increase was the smallest move of the streak – with its target range now set to 4.5 – 4.75 percent. In its policy statement, Central Bank officials signaled that while “inflation has eased somewhat,” the fight against inflation has not come to an end and that the Fed “will stay the course until the job is done.” Translation: more hikes are on the way.
Yesterday, the International Monetary Fund raised its 2023 global growth outlook slightly, from their last projected contraction to 2.9% form 2022, to a slightly less discouraging 2.7%. They pointed to “surprisingly resilient” demand in the United States and Europe, an easing of energy costs and the reopening of China’s economy after Beijing abandoned its strict COVID-19 restrictions.
Tomorrow the European Central Bank will meet to determine their own next move in that region’s battle against inflation. They’re almost certain to notch rates up another 50 basis points up to 2.5 percent on their deposit facility, as it’s termed. And similar to the attention paid to Fed chair Jerome Powell’s words, all ears will be honed in on ECB President Christine Lagarde’s communications on the central bank’s guidance and future decisions.
All this is taking place amidst the backdrop of slight improvements in U.S. and Chinese economic expectations. One could make the case that the green shoots indicating signs of improvement for the economy mentioned in the Jan. 18 blog at the very least haven’t withered.
And speaking of not withering, while the outlook for the South American soybean crop remains a concern, traders have started removing the weather premium from prices.
This could contribute to an asset-wide decline in volatility and leave markets prone to trending – up or down.
A Cannon broker will be able to assist, provide feedback and answer any questions.
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March mini SP 500 possible PriceCounts Scenario below
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Futures Trading Levels
for 02-02-2023
Economic Reports, Source:
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