2024-02-25 17:44:58
Live: Orbex’s chief market strategist, Asim Mansour, said that the US market’s closures last week could give a negative signal to the dollar in the medium term, especially after the reserve minutes appeared on the opinions of Federal Council members and their desire to ensure the stability of inflation for a longer period. It is close to the target of 2%.
Mansour added in statements to Al Arabiya Business that this week will witness the emergence of monthly consumption data, which may come to confirm the Federal Council’s point of view regarding not rushing to reduce interest rates and ending the policy of monetary tightening.
He explained: “During the second quarter of 2024, we may see a further slowdown in inflation and labor market data, as well as the Federal Reserve’s preferred consumer spending index in measuring inflation rates.”
He stressed that the technology sector shares contributed to focusing on the financial markets and reviving the indicators, but there is a state of concern about layoffs in this sector, especially after the layoff of 42 thousand employees from sector companies from the first of January until today, saying that in 2023 250 were laid off. One thousand employees, at a rate of 720 employees per day, but in 2024, 740 employees will be laid off per day, and thus the numbers indicate that there is a faster pace of employee layoffs than last year.
Mansour attributed the layoffs of workers in technology companies to the companies’ desire to reduce costs, in favor of investing in American chips and artificial intelligence, stressing that its impact will appear in the American labor data that will be announced next Friday, increasing the selling pressure on the dollar.
On the other hand, “Mansour” indicated that the minutes of the meeting showed that there is a decline in the probability of reducing interest during next July, bringing the probability to 68% compared to more than 40% in favor of stabilization, explaining that the matter will be determined according to the personal consumption index and the American labor market index, Which is expected to decline in the coming months.
He continued: “The results of the first interest meeting were last January 31, before the latest labor and inflation data, and therefore the interest statement next March may be characterized by more stringency, and therefore we expect the US Federal Reserve to reduce interest rates, but not at large or even close rates.” levels prior to the Covid-19 pandemic.
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