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US Fed chills the f*ck out.. but not for long 👀

US Fed chills the f*ck out.. but not for long 👀

PLUS: Is this the start of a global recession? 😬

It’s Thursday! We hope you have an awesome day.

Maybe you can wind down later with a candle lit dinner?

Yeah.. we’ve all been there. 😕

Only have a minute? ⏱

Key Takeaways:

USA: After 10 rate hikes, the Fed finally decided to chill out. The interest rate, as per the consensus, remained unchanged at 5.25%.
New Zealand: Well there you have it folks. A second quarter of negative GDP for New Zealand. 😕 The recession has officially begun.
AUS: Following a loss of 4,300 jobs in April and blowing the consensus out of the water, Australia had over 75,000 more employees in May! 🤯 This brought the unemployment rate back down to 3.6%.
China: Retail sales were up 12.7% compared to last May BUT that data is pretty twisted. We’re basically comparing two completely different countries. 🤷‍♀️
USA: MCSI will be released tomorrow. The consensus is a score of 60.
If the actual figure beats 60, expect EURUSD ↓.
If the actual figure is below 60, expect EURUSD ↑.

US Fed chills the f*ck out.. but not for long 👀

Now would you look at that!

After 10 rate hikes, the Fed finally decided to chill out. The interest rate, as per the consensus, remained unchanged at 5.25%.

But America shouldn’t celebrate quite yet.

Powell told us to expect two more increases before the year is over. He said the Fed is basically just using this pause to gather some more information before deciding what to do next.

Inflation is still too high and the prediction is that the interest rate will reach 5.6% in 2023. 👆🏼

Any chance of a rate cut anytime soon?

Jerome Powell says NOPE. 🙅🏻‍♀️

Well, actually he said:

"Not a single person wrote down a rate cut this year." & "Rate cuts this year will not be appropriate."

Jerome Powell, Fed Reserve Chair

New Zealand Enters A Recession 📉

Well there you have it folks. A second quarter of negative GDP for New Zealand. 😕

The recession has officially begun.

GDP came in at -0.1% this quarter. Consensus was spot on. 👌🏼

Year-over-year is looking a little better coming in at 2.2% but still lower than the consensus of 2.6%.

This news doesn’t actually come as a huge surprise.

The Reserve Bank of New Zealand has been expecting a mild recession to come in right around this time. They’ve been predicting this since last year.

They say the recession will last at least 12 months. 🗓

What happens now?

During a recession, a country will usually see:

A rise in the number of people without jobs. 🤦🏼‍♀️
Very high prices, especially food and gas. 🥗 ⛽️
A big drop in consumer spending. 👇🏼

And that’ll bring us to the…

Trade Of The Day 📈

NZDUSD

Wednesday June 14th, 2023 - 18:45 EST - New Zealand Enters A Recession

WTF Has Gotten Into Australia? 👀

Ummm.. holy sh*t Australia?

Following a loss of 4,300 jobs in April and blowing the consensus out of the water, Australia had over 75,000 more employees in May! 🤯

This brought the unemployment rate back down to 3.6%.

Aussies are even beating pre-pandemic numbers! Before Covid-19 there were roughly 13 million employed Australians.

Now?

Over 14 million. 👷🏼

The RBA isn’t going to be happy about this.

After fighting to curb inflation, y’all went and got everyone jobs and now there’s more money to spend.

That 11-year high interest rate of 4.1% doesn’t have anything on the 4.6% it’s predicted to hit by the end of 2023.

China’s Retail Sales Are Deceiving 🧐

Don’t be fooled by the increase in China’s retail sales year-over-year.

Yes, they were up 12.7% compared to last May BUT that data is pretty twisted. We’re basically comparing two completely different countries. 🤷‍♀️

One version of China (last May) was under extremely strict Covid lockdowns and the other version (current) is wide open.

Sales are down from an 18.4% increase last month and momentum is seriously falling from Q1. 📉

The consensus is that China is going to pause the interest rate. But this news might change their tune.

Will the central bank cut rates to get people spending more money? We will find out Monday. 👀

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Friday News

Not much high impact news for you tomorrow. But after this crazy week, it’s a welcomed break. 🥱

Here’s what you’re in for:
(All times in EST)

10:00 — MCSI - Is the US ready to spend some money? 🤑
- Event: Michigan Consumer Sentiment Index(Jun)
- Major pairs to watch: EURUSD, XAUUSD

MCSI - Is the US ready to spend some money? 🤑

Now when I first read ‘Michigan Consumer Sentiment Index’ (or MCSI) I thought the data would be all about Michigan.

I was wrong. 🤨

It just starts with the word ‘Michigan’ because the University of Michigan is the one who conducts the survey.

Soooo.. what is it? 🤷‍♀️

Basically, the University will call over 500 people across the United States each month and ask them super personal questions about finance.

Stuff like:

Are you better off financially than you were last year? 👀
Do you think you’ll be doing any better next year? 🧐
Do you think now is a good or bad time to buy major items? 🛋
How is the economy lookin’ to you? 🙃

The point of the survey is to figure out how people feel about their current financial situation, how they think economy is doing and how they think the economy will perform over time.

Really, it gives us an idea of whether or not consumers are willing to spend their money. 💰

And why is that important?

Because consumer spending makes up almost 68.5% of the U.S. economy.