Atlanta Fed President Envisions One Rate Cut This Year, but Diligently Monitoring U.S. Economic Indicators

Recent remarks from U.S. financial authorities have been dominated by Atlanta Fed President Bostic's projection of one rate cut within the year. On the other hand, the latest interest rate outlook from the members of the U.S. FOMC has continued to suggest three rate cuts within the year. This has caused market speculation to swing, especially since there was a prevailing theory of two rate cuts in the market prior to this. This weekend, amidst the Easter holidays, a moderated discussion between Fed Chair Powell and Kai Ryssdal at the Federal Reserve Bank of San Francisco's macroeconomics and financial policy conference is scheduled.

However, it's worth mentioning that it may not be wise to overreact to the statements of a single financial authority or the results of a single indicator announcement. For ultra-short-term trading, these statements and indicators are welcomed as fodder for increased volatility. It becomes a game of quick reflexes. Yet, to grasp the overall trend, it's beneficial to take a step back and look at the bigger picture. This week marks the end of the month and quarter, and with the upcoming Easter holiday abroad, it's a good time to adopt a more relaxed stance.

The upcoming overseas market will see the release of a series of U.S. economic indicators including preliminary durable goods orders (February), housing price index (January), S&P Case-Shiller home prices (20 cities) (January), Richmond Fed manufacturing index (March), and the Conference Board's consumer confidence index (March).

Key indicators to watch are the U.S. durable goods orders (preliminary) (February) and the U.S. Conference Board consumer confidence index (March). The market consensus for durable goods orders is an increase of +1.0% month-over-month, and +0.4% month-over-month excluding transportation equipment, both turning positive from the previous month. The consumer confidence index is expected to rise to 107.0 from the previous 106.7.

Regarding speaking events, Governor Müller of the Bank of Estonia will publish economic forecasts. Senior Deputy Governor Rogers of the Bank of Canada will give a speech. There will also be a U.S. 5-year note auction for $67 billion.

In the medium to long term, the U.S. might start lowering rates, but until that happens, there will likely be a period where the market remains sensitive to U.S. economic indicators.

However, this week the trend seems to be dominated by selling the U.S. dollar. As planned, a bearish outlook on the U.S. dollar has led to buying positions in U.S. stocks, gold, etc.