1. Home
  2. Live Market Analysis
  3. Countdown to the Release of the US Meeting Minutes
Countdown to the Release of the US Meeting Minutes
17.08.2022

The Index futures in the US declined during this morning’s Asian and European trading sessions. This may be the result of traders looking for further clarification from this evening’s Fed minutes. Alternatively, we will see a different movement once the stock market opens. The price of the NASDAQ is seeing the strongest decline measuring at 0.82%, followed by the SNP500 which declined by 0.74%, and the DowJones by 0.52%.

The prices of commodities also declined during today’s trading session. It's important to note that the US monetary policy can also have a significant effect on their price. The price of crude oil continues its negative price movement and, if maintained throughout the day, will form its 4th consecutive bearish day.

FX Market

Currently, the US Dollar Index remains 0.10% higher than the market open. Market participants are mainly looking at tonight’s Fed report for further certainty as well as the US Retail Sales figures for the previous month. However, the speeches of Fed members tomorrow will have a significant impact along with the employment figures.

The Euro Currency Index known as the EURX or EXY, declined to 101.68 this morning. Also this morning, Germany announced that the country will not have enough energy for the winter months if Russia cuts gas supplies. Another significant influential factor will be the European Central Bank’s next conference as most economists are now advising that a further hike may be needed within the coming months but a concrete indication would be ideal.

With regards to the Pound, most experts are now advising that the Bank of England will opt to increase the interest rates by 0.50% rather than the expected 0.25%, after seeing the inflation figures rise significantly. Inflation in the UK is now at 10.1%, which is much higher than most countries within the region. Inflation figures from the UK’s main competitors are confirmed below:

  • Germany - 8.5%
  • France - 6.8%
  • Italy - 8.4%

However, it should also be noted that some countries have experienced similar levels of inflation such as Spain and the Netherlands.

The New Zealand Dollar has been unable to maintain momentum and hold its value after the decision of the Reserve Bank of New Zealand to raise the interest rate to 3%. This may have partially been due to the rate hike already being priced into the market. The accompanying statement saw the head of the regulator, Mr Orr, advising that although economic growth in the country is slowing down, a recession is not expected in the immediate future and the bank still sees value in increasing interest rates while employment remains stable.

AUD/USD

The US Dollar has generally improved over the past week against most currencies but has specifically performed well against the Australian Dollar. The price today significantly declined by 1.21% or 85 PIPs which would be the largest decline since the 2nd of August if maintained. The price movement is mainly a result of the US Dollar slightly increasing today, but also due to the poor data released from Australia regarding the employment sector.

AUDUSD - 17.08.2022.png AUD/USD 12-hour price chart on August 17th.

The second quarter Wage Price Index was released, which measures the changes in wages for the country. The indicator remained at the same level of 0.7% rather than slightly increasing as forecasted. It was first predicted that the index would rise to 0.8%, but it corrected from 2.4% to 2.6% year-on-year with estimates of experts set at 2.7%. Wages in Australia are rising at their highest pace in 7 years, but this is also the case in most countries. Nonetheless, the country is struggling with record inflation, especially since the wage growth is behind some other countries.

However, some economists have reacted positively as major increases in salaries could catalyze a new wave of consumer price increases as businesses shift the costs of hiring and retaining employees onto their product/service buyers. Therefore, higher wage growth can support the levels of inflation resulting again in higher interest rates. If interest rates continue to increase and become unattractive then, of course, it can result in the economy crashing as borrowers are not able to keep up with debt. Though, so far we can see the price has indeed reacted negatively.

The American currency looks more attractive to investors than its Australian counterpart, according to Bloomberg. The US economy has been largely coping well with the inflation and energy crisis. Specifically, certain industries and the employment sector, which so far continues to improve. This afternoon, market participants will be looking for information about the size of the future rate hike as the market is uncertain as to whether it will be kept at 0.75% or reduced to 0.50%. Any hints can potentially cause a significant movement in the price of the AUD/USD pair.

Key Takeaways:

  • The US Dollar increases significantly against the NZD and AUD.
  • Investors are awaiting the release of the Fed’s Meeting Minutes and the US Retail Sales figures.
  • New Zealand increases its national interest rate to 3%.
  • The Euro Currency Index declines.
  • Economists contemplate whether the BOE will increase interest rates by 25 or 50 basis points.
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Copyright © 2022 – All rights reserved.

NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.

Any trademarks appearing on this website are the property of their respective owners.

The NAGA Group AG is the holding company of various companies, such as NAGA GLOBAL LLC, NAGA MARKETS EUROPE LTD, NAGA Technology GmbH, NAGA Pay GmbH and has a close link with NAGAX Europe OÜ.

RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.

Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the top-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.

Restricted countries: NAGA Group AG does not provide services for the residents of certain countries, such as Afghanistan, Albania, American Samoa, Australia, Barbados, Belgium, British Virgin Islands, Burkina Faso, Cambodia, Canada (including Quebec), Cayman Islands, Central African Republic, Congo, Democratic People's Republic of Korea, Democratic Republic of the Congo, Gibraltar, Guam, Haiti, Iran, Iraq, Isle of Man, Israel, Jamaica, Jordan, Libyan Arab Jamahiriya, Mali, Monaco, Morocco, Myanmar, Nicaragua, Philippines, Russian Federation, San Marino, Senegal, Serbia, Somalia, South Sudan, Sri Lanka, Syrian Arab Republic, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, US Minor Islands, US Virgin Islands, USA, Vanuatu, Yemen, Zimbabwe.

Member of NAGA Group AG that is publicly listed in Frankfurt Stock Exchange.
close icon
By using this website, you agree to our cookie policy