US Markets were closed overnight, for a ‘Day of Mourning’, commemorating the life and death of former President Jimmy Carter. This enabled markets to take stock and digest the Fed minutes, released before markets closed, late Wednesday. The Fed minutes were uncertain about further interest rate cuts, and about the pathway forward for inflation, which appears to be on the rise again. The real big concern for the Fed is Trump policies and the impact they will have on the economy, and more particularly, inflation. Trump has signalled his intent, describing a possible proclamation of an ‘economic emergency’, in order to impose widespread tariffs. Markets continued to support the US Dollar, as bond yields surge, following the Fed’s caution. The EUR flounders around 1.0300, while the GBP tumbled back to trade as low as 1.2250.Commodity currencies remain under pressure from an attractive reserve, with the AUD crashing below 0.6200, while the NZD slipped back to 0.5570. Australian trade data was stronger than expected, with big gains in imports, while markets tread water during the US Holiday. All eyes will turn now to the Non-Farm Payroll number, which is expected to be soft, but will be another contributor to the Fed’s calculations, when determining future rate cuts.
