EUR/USD flows: Consolidation; mulling Bessent and the shape of the Fed curve
Oil fills gap, chip earnings strong
Dollar takes a breather consolidates recent action
Debate over Bessent's comments and what that might say for Fed policy
Main points of interest this morning are oil continuing to fall off, and good earnings. Brent has fully filled the gap down to the 27th Feb now, in the $72s. Strong earnings from Micron meanwhile (profits per share at $25.11 vs mkt $20.78) , reporting $22bn in order commitments, with Qualcomm similarly flagging $15bn in data centre sales. The Nasdaq future is up 2% at present after a couple of down days.
FX though somewhat steadying, EUR/USD still finding some nearby consolidation back at the 1.1350 area that was oversold taken out and then recouped yesterday. USD/NOK also not seeing a higher high yet today either even with the dregs of the oil follow through. The markets are due a breather to consolidate the recent fast moves before taking stock.
Still some chewing over Bessent's speech and follow up CNBC interview where he discussed Greenspan - unprompted although with obvious context - and his move in 1997 to give "one tap on the brakes rate hike", followed by cuts and "the longest sustained growth period in history. And I think there’s a very good chance that we could see that again." That can colour the way the market prices the short end of the curve.