Today market analysis on behalf of Milad Azar Market Analyst at XTB MENA
The US Dollar traded on a positive note ahead of this week’s key economic releases, which could shape investor sentiment. Recent data reported a sharp decline in consumer confidence and mixed PMI numbers, raising concerns surrounding economic growth and weighing on the greenback. Market participants will therefore closely monitor tomorrow’s GDP growth and Friday’s PCE numbers, as they could provide crucial hints on the Fed’s next move. Robust data will likely reinforce a hawkish narrative and boost the dollar, while softer data may fuel selling pressure.
Despite recent Federal Reserve comments signaling a restrictive monetary policy due to persistent inflation and solid economic growth, recent economic data has cast doubt on future rate decisions. Yesterday, Fed Richmond President Thomas Barkin adopted a cautious stance, adding to the market uncertainty.
Meanwhile, US Treasury yields climbed across maturities, with the 10-year note reaching 4.3%, following the US House of Representatives’ narrow approval of Trump’s USD 4.5 trillion tax-cut plan. The bill now heads to the Senate, raising expectations of increased debt issuance and further supporting yields.