Forex Fundamental News Facts for 17th May, 2024

Forex Fundamental News Facts for 17th May, 2024

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[Quick Facts]
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1. Fed’s Williams welcomes inflation data, not ready to seek rate cuts.
2. Fed’s Mester prefers to keep interest rates restrictive for longer.
3. The BOJ may raise interest rates three more times this year.
4. Fed’s Bostic says April housing inflation slowdown is welcome.
5. U.S. crude oil inventories fall and investor risk appetite rises.
6. U.S. weekly initial jobless claims fall as labor market eases.

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[News Details]
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No Immediate Rate Cuts, Says Fed’s Williams:

John Williams, the President of the New York Federal Reserve, welcomed the cooling of the Consumer Price Index (CPI) in April. He sees this as a positive sign, indicating a gradual slowdown in inflation. However, he doesn’t believe the current indicators warrant a shift in monetary policy, implying that interest rates won’t be reduced in the near future. He also doesn’t see a need for tightening monetary policy at present.

The U.S. economy continues to be strong and is achieving a better balance. The labor market remains tight, improved by reducing excess demand rather than increasing unemployment. Unemployment is projected to increase to 4% this year, and the Personal Consumption Expenditures (PCE) is expected to end the year slightly above 2%.

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Fed’s Mester Advocates for Longer Restrictive Rates:

Cleveland Fed President Mester believes that upcoming economic data will indicate a longer time frame to regain confidence in achieving the inflation target. In light of the current situation, she advocates for maintaining a tight monetary policy stance as it would allow for more informed decisions based on future inflation trends.

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Potential Rate Hikes by BOJ:

Toshitaka Sekine, the former chief economist of the Bank of Japan (BOJ), suggests that the central bank might increase its benchmark interest rate three more times this year. The next hike could be as early as June, considering there’s ample room for adjustments to the BOJ’s overly accommodative settings.

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Fed’s Bostic on Housing Inflation Slowdown:

Atlanta Fed President Bostic considers the slowdown in housing price gains in April’s CPI report as an important indicator for the direction of inflation. However, he cautions that it’s too early to draw conclusions based on a single data point.

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U.S. Crude Oil Inventories Decrease, Investor Risk Appetite Increases:

Crude oil prices ended higher on Thursday, despite earlier losses. Traders are balancing the decline in U.S. crude inventories against the U.S. inflation outlook. The first consecutive weekly declines in U.S. crude inventories since March have brought stockpiles to their lowest in nearly a month.

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U.S. Weekly Initial Jobless Claims Decrease:

U.S. initial jobless claims fell last week, indicating potential strength in the job market. The figure had risen to its highest level in over eight months in the previous week, and it decreased last week. Much of the increase in initial jobless claims from the previous week can be attributed to a surge in New York jobless claims related to school spring break. The U.S. labor market remains healthy and is steadily re-balancing after the Federal Reserve raised interest rates by 525 basis points since March 2022. Easing labor market conditions and declining inflation raise the likelihood of a rate cut in September.

On May 16, the U.S. Department of Labor announced the most recent jobless claims data at 8:30 a.m. ET. For the week ending May 11, the initial jobless claims in the U.S. were reported to be 222,000, a slight increase from the anticipated 220,000, but a decrease from the preceding week’s 232,000.

The four-week moving average stood at 217,750, which was higher than the previous week’s average of 215,250. This data suggests a potential strengthening of the job market as the number of jobless claims decreased last week, reversing some of the increase seen in the previous week, which had reached an eight-month high.

A significant portion of the increase in jobless claims from the previous week was due to a surge in claims in New York, linked to the spring break period. However, the week ending May 11 saw a reduction in initial jobless claims, partly due to a decrease in claims from New York.

The labor market has been slowly adjusting since the Federal Reserve started increasing interest rates in March 2022, culminating in a hike to 5.25%. The easing of labor market conditions and a decrease in inflation have increased the probability of a rate cut in September.

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🔥News releases on THIS WEEK :

16/05 Thu 5:50am JPY Prelim GDP q/q

16/05 Thu 7:30am AUD Employment Change

16/05 Thu 6:30pm USD Unemployment Claims & Building Permits & Philly Fed Manufacturing Index

16/05 Thu 7:15pm USD Industrial Production m/m

16/05 Thu 8:00pm USD FOMC Member Barr Speaks

16/05 Thu 8:30pm USD Natural Gas Storage

17/05 Fri 8:00am CNY Industrial Production y/y & Retail Sales y/y

17/05 Fri 8:15pm USD FOMC Member Waller Speaks

N.B. Time mentioned here is on Gmt +6

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Sources :
– CNBC, Bloomberg, Reuters, Fastbull, Yahoo Finance, CNN, ForexFactory News, Myfxbook News etc

Prepared to you by “Akif Matin“

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