A very minor shift in the Fed’s rate hike expectations has roiled risk assets and strengthened the U.S. Dollar. Via their dot plot, committee members now anticipate 2 rate hikes through the end of 2023.
This week builds up into Thursday’s monumental inflation data, ECB meeting, and Initial Jobless Claims. Portfolio managers and traders want to be long risk assets such as stocks and commodities, but fear inflation that has begun to run hot.
U.S. benchmarks are now pointing lower and working their way through supports ahead of the bell. Despite exuding a bullish tone, we’ve warned that an inability to hold higher prices will encourage a probing lower.
July cocoa has continued to move lower over the past few sessions. Traders have experienced a choppy few weeks of trading after a small “V” in the chart. Demand is slightly on the rise as more easing occurs in the UK and the U.S.
The U.S. Dollar has legged to the lowest level since the February 25th reversal, powering commodities and risk assets once again. This would be the lowest close since the first trading week of the year for the U.S. Dollar Index.