Is the Fed pivot dead? Well, not exactly. But the early whispers are certainly not ringing anymore after the hot US jobs report on Friday. That is leaving markets to believe that we are at least likely to see a 50 bps rate hike in September, with 75 bps still on the table. It’s now over to the remaining data points before the FOMC meeting next month to vindicate which decision the Fed might take.In any case, policymakers will continue to defend the narrative to markets that this isn’t the recession you’re looking for. But as mentioned within the linked post, stagflation risks are building and that should not be ignored either.For today, the market mood is calmer with Treasury yields calming down alongside the dollar. US futures are tepid so that isn’t indicative of much in terms of risk sentiment. The greenback is trading more mixed with slight gains seen in the aussie and kiwi, though narrower ranges are still prevailing for now.Looking ahead, there isn’t much to shake things up and we are likely to see a more pensive mood build before the US CPI data on Wednesday.0545 GMT – Switzerland July unemployment rate0800 GMT – SNB total sight deposits w.e. 5 August0830 GMT – Eurozone August Sentix investor confidenceThat’s all for your session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
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