STIR: FED Reverse Repo Operation

 St Louis Fed President Musalem's prepared remarks are in this link  He is typically cautious on future rate cuts, but less so than earlier this year when he was one of the most hawkish members of the FOMC, summing up his current view on policy: "I believe the FOMC can judiciously and patiently evaluate incoming information in considering further lowering of the policy rate. Future adjustments to the policy rate can be accelerated, slowed or paused as appropriate in response to new information about the outlook and risks for the price stability and employment objectives.""

• It's interesting that, like his fellow hawk Dallas's Logan earlier, points to downside risks to employment stemming from higher long-term rates, even as the Fed is attempting to ease restriction by cutting short-end rates. He goes a little further than Logan in tying the rise of long-end premia to the Fed potentially "easing too much too soon" - in other words, cutting the Fed funds rate too quickly or too much poses risks to the employment side of the mandate by increasing long-end borrowing costs.
• "Because the economy remains strong and inflation is above target, easing too much too soon could prompt an increase in demand that initially outpaces supply, further delaying inflation convergence. It could also be counterproductive for maintaining full employment. A rapidly declining federal funds rate could
  
  increase real or inflation risk premia along the yield curve, thereby adversely impacting the housing market and other interest-sensitive sectors that depend on capital market financing. Of course, easing too little too late could be associated with an unwelcome deterioration in the labor market, even as inflation remains on a course toward 2%."
• On inflation, he notes of today's CPI report "Today’s release indicates that core consumer price index (CPI) inflation, at 3.6% and 3.3% on a three- and 12-month basis
  
  through October, also remains elevated." But "recent information suggests to me that the risk of inflation ceasing to converge toward 2%, or moving higher, has risen, while the risk of an unwelcome deterioration in the labor market has remained unchanged or possibly fallen."

• RES 4: 1.0997 High Oct 8   
• RES 3: 1.0937 High Nov 5 and key short-term resistance  
• RES 2: 1.0761/0811 Low Oct 23 / 20-day EMA
• RES 1: 1.0683 Low Nov 6     
• PRICE: 1.0571 @ 16:15 GMT Nov 13
• SUP 1: 1.0556 Low Nov 13
• SUP 2: 1.0517 Low Nov 1 2023
• SUP 3: 1.0484 1.00 proj of the Sep 25 - Oct 23 - Nov 5 price swing  
• SUP 4: 1.0448 Low Sep 3 2023 and a key support     

EURUSD remains in a clear downtrend and this week’s extension reinforces the current trend condition. The pair has traded lower again, Wednesday. This confirms a resumption of the bear trend and, note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. Sights are on 1.0517 support, the Nov 1 ‘23 low. Initial firm resistance is 1.0811, the 20-day EMA.