Last week, in the FOMC Interest Rate Decision meeting, Fed raised the interest rate to 5.50% as expected which is in line with market consensus. In the Q&A session, some analysts observed a swift focus on the response of the Fed. Let’s look into some changes in the focus here.
The following is part of the Q&A in the press conference, which makes some analysts think that now the focus should be on job openings rather than inflation rate indicators such as CPI and PCE.
If you are interested to see all the Q&A, you can refer to FOMC Q&A.
With the swift focus, we believe we need to be cautious about all upcoming job data, especially ADP Nonfarm Employment Change and Nonfarm Payroll (NFP).
Based on the analyst’s comment, Fed wishes to see the NFP reduce to around 100K in the coming months. The following is the recent NFP result and you can see that it is slowly trending down but then still might spike up on and off.
This week’s consensus is 184K. If the result is higher than expected, then the rate hike is not done yet, more rate hike is required. If it is lower than that, it means the current rate hike might be sufficient, and last week’s rate hike could be the last one. The market will adjust and price in the rate hike expectation based on this job data.
This week, we will have ADP Nonfarm employment change on 2 Aug and NFP on 4 Aug.
For AUDCAD, Australia RBA will have an interest rate decision on 1 Aug too. If you would like to play safe, you can stop your AUDCAD trading from 31 July onwards.
Recommendation
With this outlook, and to be on the safe side, we strongly recommend all Ophiuchus and Limitless EA users to schedule to stop trading for this series of economic announcements starting from 1 August till 5 Aug. You can use the stop trading period feature in the EA to do that. You can also decide to start the stop trading for a longer period to wait for the dust settles. (eg, stop trading from 1 Aug and only start trading after Tuesday) if you would like.
Disclaimer – Please note that Limitless Trading is not liable for our recommendation and is not responsible for any loss or profit caused by this recommendation. This is general advice without considering your personal circumstances. You should assess your personal circumstances and perform your own research to make decisions for your trading.