Today’s meeting of the US Federal Reserve is expected to see hawkish rhetoric on the prospect of future rate cuts, with markets now not expecting any cut until November 2024. 

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1. The US Federal Reserve will be holding a policy meeting today. There is a near-universal expectation rates will be held, and the Fed will state that it cannot cut rates until there is progress bringing down stubbornly persistent inflation. There is no consensus expectation of any rate cut until November later this year. The US Dollar is rising and is very close to making a new 6-month high price, while stock markets have sunk over the past day.
2. The last 24 hours has seen firm losses in equity markets in the shadow of pessimistic market expectations from the Federal Reserve. Major US equity indices such as the Nasdaq 100 Index and the S&P 500 Index saw relatively sharp losses yesterday, while the Japanese Nikkei 225 Index just saw its worst month in years after reaching new record highs earlier in the year, like the major US indices.
3. The Japanese Yen remains in market focus today after its dramatic price movements in recent days. The Yen now seems to be weakening again, producing another advance by the USD/JPY currency pair and in most Yen crosses.
4. In the Forex market, since today’s Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest major currency has been the Swiss Franc.
5. Copper futures fell strongly yesterday after reaching new 2-year highs the previous day, which threatens to knock trend traders out of the long trade here.
6. There will be a few high-impact US data releases today before the Fed meeting:
   • ADP Non-Farm Employment Change           
   • Final Manufacturing PMI       
   • ISM Manufacturing PMI                     
   • JOLTS Job Openings
7. There were several high-impact data releases yesterday:
   • Canadian GDP – this came in slightly lower than expected, with only a 0.2% increase over the past month.
   • US CB Consumer Confidence – this came in a bit worse than expected.
   • US Employment Cost Index – this came in higher than expected, at a quarterly increase of 1.2%, suggesting persistent inflationary pressure from this direction, which is probably helping boost the US Dollar.
   • New Zealand Unemployment Rate – as expected, unchanged at 4.3%.
8. It is a public holiday today in France, Germany, Italy, Switzerland, and China.

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