Today’s market weather brought light showers of optimism ahead of the US-China trade talks. US indexes recovered after Tuesday’s slide as concerns over the US and China’s trade war escalation may see some relief when trade talks resume on Thursday and Friday.
According to the latest JOLTS report, jobs are sliding a bit but they’re also plentiful.
On the monetary policy front, Fed Chairman Jerome Powell announced that the central bank plans to increase its purchases of short-term Treasury securities to prevent another liquidity shortage in the overnight lending markets (remember, the repo crisis?).
So, instead of buying longer-dated securities, the Fed’s focus will be on shorter-dated Treasury bills. Consequently, the US dollar slid after Powell’s comments. Some analysts, believe that the Fed may be easing monetary policy at a slower rate than other central banks, which may be generally favorable to the dollar as a safe haven currency for international investors.
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