FED: Beige Book: Economic Activity Declining Slightly (1/3)
Jun-04 18:33
The June 4 Beige Book reported that "economic activity has declined slightly since the previous report". Uncertainty was a key theme, with manufacturing activity and household consumption showing signs of weakness. Overall the outlook remained "slightly pessimistic and uncertain". Note responses were collected up to May 23, so it's unclear the degree to which this reflects developments such as the US-China trade war de-escalation on May 12.
Among the 12 Fed districts:
- 3 reported flat/little change in activity since the previous report in April (Cleveland, St Louis, Dallas), vs 3 in April
- 3 reported slight/mild growth (Atlanta, Chicago, Richmond), vs 5 in April
- 6 reported slight/modest/moderate slowdowns/declines in activity (Boston, NY, Philadelphia, Minneapolis, Kansas City, San Francisco), vs 4 in April
- From the Beige Book summary: "All Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions. Manufacturing activity declined slightly. Consumer spending reports were mixed, with most Districts reporting slight declines or no change; however, some Districts reported increases in spending on items expected to be affected by tariffs. Residential real estate sales were little changed, and most District reports on new home construction indicate flat or slowing construction activity. Reports on bank loan demand and capital spending plans were mixed. Activity at ports was robust, while reports on transportation and warehouse activity in other areas were mixed. On balance, the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report. However, a few District reports indicate the outlook has deteriorated while a few others indicate the outlook has improved."
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
STIR: Jun'25 SOFR Put Condor Buy - Looking for More
May-05 18:31
- +15,000 SFRM5 95.68/95.75/95.81/95.87 put condors, 2.0 ref 95.78
USDJPY TECHS: Resistance At The 50-Day EMA Remains Intact
May-05 18:30
- RES 4: 149.28 High Apr 3
- RES 3: 148.27 High Apr 9
- RES 2: 146.60 50-day EMA
- RES 1: 145.92 High May 2
- PRICE: 143.88 @ 15:03 BST May 5
- SUP 1: 142.88/141.97 Low MAy 1 / Apr 29
- SUP 2: 139.79 1.382 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 3: 138.82 1.500 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 4: 138.07 Low Jul 28 ‘23
Recent gains in USDJPY resulted in a move through the 20-day EMA, undermining the bear trend. However, price action remains below resistance at the 50-day EMA, at 146.60. A clear break of this average would highlight a possible reversal. For now, gains are considered corrective. Moving average studies remain in a bear-mode position highlighting a dominant downtrend. A resumption of the trend would open 139.79 next, a Fibonacci projection.
FOREX: Tale of Two Halves as Greenback Recovers Following US Data
May-05 18:11
- Initially on Monday, the US dollar traded weaker against all others in G10, as traders were happy to erode a portion of the post-NFP advance and resume the underlying trend of greenback selling. However, firmer-than-expected ISM services data assisted a solid rebound, with dollar indices now only trading in moderately negative territory as we approach the APAC crossover.
- US ISM Services Index data rose to the highest level since January 2023, and the higher-than-expected prices paid component (65.1 vs. 61.4 est.) has provided further impetus for the greenback recovery.
- This has helped the likes of EUR and GBP to edge back towards unchanged on the session, the clear underperformers in G10. For EURUSD, this translates to the pair reversing around 65 pips from session highs to trade back at 1.13. Initial key support to watch is the 20-day EMA, at 1.1264.
- A similar move for GBPUSD has seen spot narrow the gap to overnight lows of 1.3257. A bearish tweezer top formation on the daily candle chart last Monday/Tuesday highlights a short-term top. Support to watch lies at 1.3225, the 20-day EMA. A break of this level would signal scope for a deeper retracement.
- AUD remains among the best performers after an extended period of consolidation, AUDUSD is gaining following the surprisingly strong showing for Anthony Albanese in the weekend's general elections. The price action puts the rate above the 200-dma and a close above would be the first since November last year.
- Despite the dollar rebound, USDJPY remains 0.6% lower on the session at 144.10, with technical resistance levels remaining intact for now. Moving average studies remain in a bear-mode position highlighting a dominant downtrend. Lower-than-forecast inflation data in Switzerland did little to knock the ongoing optimism for the Swiss Franc. Key USDCHF resistance remain intact at 0.8333, the 2023 low and breakdown point.
