We have a holiday-shortened week in US markets owing to the Thanksgiving holiday which starts on Thursday.
Still, that doesn’t mean the week will be devoid of potentially market-moving events:
Monday, November 21
Tuesday, November 22
Wednesday, November 23
Thursday, November 24
Friday, November 25
Fed officials have continued to suggest there is more work to be done in ensuring the battle against multi-decade-high inflation is won, despite the recent cooler-than-expected US inflation report that’s been seen as a gift for stock market bulls.
It seems the FOMC would prefer to do too much rather than too little regarding rate hikes.
We should hear more on this theme this week, either from fresh policy clues contained within the incoming meeting minutes from the FOMC’s November meeting, or from the slew of Fed officials’ speeches on the wires.
Recall that the FOMC’s November policy statement was initially interpreted as dovish, before Fed Chair Powell came in strong with his hawkish messaging.
If markets get the sense that the FOMC’s leaning is more dovish than Powell lets on, that could undermine the US dollar’s relative stability of late.
The dollar index, which tracks the currency against a basket of six of its peers, has stabilised recently after falling by as much as 6.9% earlier this month.
Market consensus remains that the Fed will raise rates by 50bps at its final meeting of the year in mid-December. That would end the run of four straight jumbo-sized 0.75% rate increases.
We don’t get any top tier data from the US this week, with the next major focus being the November US non-farm payrolls report on December 2nd ahead of the inflation data on December 13th.
Perhaps the larger move for DXY may have to wait until such larger catalysts arrive.