The recession indicator plunged to fresh lows | 10 апреля 2023

10 апреля 2023, GBP/USD

The recession indicator plunged to fresh lows

GBPUSD trading plan:

U.S. employment data for March, released Friday, showed signs of persistent labor market tightness that could prompt the Fed to hike rates again next month. In the bond market, the Fed’s preferred recession indicator plunged to fresh lows in the past week, bolstering the case for those who believe the central bank will soon need to cut rates. The measure compares the current implied forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill. Pricing in futures markets shows traders betting that central bank easing later this year will drop the fed funds rate from 4.75% to 5% currently to around 4.3% by year-end. Yet projections from Fed policymakers show that most expect no rate cuts until 2024.

Investment idea: buy 1.2370 and take profit 1.2430.

David Johnson
Analyst of «FreshForex» company
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