Posted on September 17, 2024 We started the week with the market's attention once again focused exclusively on the next FED meeting on Wednesday. The forecasts of a 50 bp cut by the establishment increased during the day, especially in American hours, with probabilities that rose to 70%, which justified the weakness of the USD, which reached levels close to 1.1140 against the EUR, impacted by the reduction in the yield of the 10-year bond to levels of 3.61%. This depreciation was not only against the euro, the Dollar Index fell from 101 at the beginning of the day to 100.66 at the end. In the macro section, in the Eurozone we learned that labor costs were reduced from 5.1% to 4.7%. Positive reading for the ECB due to its impact on inflation in the services sector, one of the main battles that the establishment has left to reduce inflation in the Eurozone. In the US, the Manufacturing Index improved expectations, with a reading of 11.5 (compared to a forecast of -4.7) but offered little support to the greenback within a new session set on the future monetary policy of the FED. During today's session, the ZEW Index in Germany, the Eurozone Overall Index and Retail Sales in the US will attract the market's attention. In the first case, a reading slightly worse than its last publication is expected, 17.1. In the second, also 3 tenths worse, up to 17.6. Finally, retail sales in the US will be the last major data before tomorrow's FED meeting and we will have some volatility during its publication. Some containment in the reading is expected, up to 0.2% monthly and 0.3% annually, but in principle it is expected that it will not have much impact on tomorrow's decision, unless the deviation is significant, especially if the data is positive.
Dollar depreciates ahead of Fed meeting
