Last night’s meeting minutes from the Fed’s December announcement showed a central bank resolute in achieving its target of crushing inflation. The insight confirmed the Fed’s willingness to maintain rates at higher levels for longer. The hawkish tone saw markets react accordingly, the US dollar gained while equity markets and other risk-correlated assets headed lower. There were no new surprises from the minutes, their main purpose appeared to be a simple reminder to investors that US rates will remain at these levels for longer than many may wish to accept.
Today’s economic calendar sees services PMIs released from both the UK and the US. These data points will reflect December activity. Additionally, US ADP data will be released around lunchtime, this details the number of newly employed individuals in the private sector. This arrives before tomorrow’s key non-farm payrolls number which is expected to see 200,000 new jobs created in December.
Written by Viv Savani. 7:03am, January 5th 2023
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