Possible USD Strength Continuation?

11月15日

Here's the revised trading plan with the requested adjustments:

1. Baseline Scenario:

- Macro-Fundamental Bias: Neutral to Slightly Dovish. The Federal Reserve has recently lowered the federal funds rate to 4.50% - 4.75%, reflecting a cautious approach to monetary easing. While inflation remains somewhat elevated, the Fed is balancing its dual mandate of supporting employment and controlling inflation. Current market expectations indicate a 59% probability of a quarter-point rate cut at the December meeting, down from 82.5%.

- Short Term Sentiment Bias: Bullish. The short-term sentiment on the USD is bullish, driven by Fed Chair Powell's recent comments on the strong economy and solid job market, which have reduced the likelihood of a December rate cut.

2. Risk Event Baseline:
- Market Expectations:
- Core Retail Sales m/m: Forecast 0.3% (Previous 0.5%)
- Retail Sales m/m: Forecast 0.3% (Previous 0.4%)

3. Surprise Scenarios:

- Positive Surprise:
- Plan: If retail sales figures exceed expectations, this will likely reinforce the bullish sentiment on the USD. Consider increasing long positions in USD pairs, particularly against currencies with dovish central banks. Additionally, look for opportunities in sectors that benefit from strong consumer spending, such as retail and consumer discretionary stocks.

- Negative Surprise:
- Plan: If retail sales figures come in below expectations, the market reaction is expected to be muted given the current sentiment. Maintain existing positions but be prepared to adjust if subsequent data or Fed communications indicate a shift in the economic outlook. Monitor for any signs of weakening consumer confidence or spending that could impact broader market sentiment.