Firecracker week in the USA. What will the week bring?

Last week, investors' attention was focused primarily on the United States. Overseas, not only is the earnings season for listed companies still underway, but we also learned about the Fed's position on interest rates and the latest data from the American labor market. A stronger dollar pushes down EUR / USD below the level of 1,08, and the S&P500 records another week of increases.

The Fed is not feeling the pressure

Undoubtedly, the most important market event of the past week was the Fed's monetary decision. The Federal Reserve, of course, left rates at the current level, but more important than the decision itself were the indications regarding the date of the first rate cut in years. The Fed effectively lowered market expectations regarding easing already in March, and the market consensus on this issue moved to May. At the same time, the Reserve announced the continuation of the QT program, which, given the simultaneous easing of monetary conditions, may be considered a somewhat hawkish move.

Taking into account the state of the American economy - and especially the latest data from the local labor market - the Fed does not feel pressure to quickly reduce interest rates. NFP report once again positively surprised investors with a value almost twice as high as forecast. The significant acceleration in wage growth and the lack of the expected increase in the unemployment rate suggest that despite the Fed's restrictive monetary policy, the US economy remains resilient.

There is also a positive surprise in the case of the quarterly results of the largest American technology companies. The dynamic growth in cloud revenues presented by Microsoft and the announcement of the first-ever dividend payment by Meta supported market bulls last week. Will this trend continue in the coming days?

In today's webinar:

• Fed postpones pivot... when will the first rate cut be?
• What does the data tell us?
• What did technology companies show?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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