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  • Lester Davids

TRADING THE NUMBERS: U.S. Interest Rate Decision

Updated: Jun 12



By Lester Davids, Analyst. Wednesday, 12 June 2024


For traders looking to potentially profit, high-impact economic events come with both risks and rewards.


Take last week Friday's U.S. payroll data which vastly exceeded consensus expectations. At a print of 272,000 (vs the expected 185,000), the market's positioning caused a massive intraday unwind, with the US Dollar finding a bid, the Euro being sold off and Gold coming under pressure on the back of a sharp rise in bond yields. In the lead up to the event, Unum Capital clients were well prepared to capitalize on the potential volatility.


Gold - 2x Opportunities To Profit


The plan, set out on last week Monday, was to sell on a rally into $2363/2375 and/or buy on a print into $2288/2276. On Thursday, the commodity traded into the sell range, with the data release bringing out a wave of selling pressure that helped to move those who took a short view, well into profit. By Friday's close, the gold had traded into the buy zone and by Monday and Tuesday, the gold had recovered off Friday's lows.



Inflation Data + U.S. Federal Reserve: Interest Rate Decision


The outsized jobs number was indicative of a robust labour market and to a large extent, may be discounting a view that an interest rate cut is off the cards for today's decision. While we could see rate remain on hold, it will be the press conference as well as the economic projections that will be the main driver of asset prices subsequent to the release. Before tonight's decision at 8pm, U.S. inflation data can also be expected (2:30pm, South African Time).


Similar to last week's payrolls data, it is bond yields that would offer the first real clues of the market's interpretation, while the USD is likely to be affected. In addition, precious metals such as Gold and Silver may display an increase in volatility amidst the market's positioning following the release.


To gain access on how the Unum Capital Trading Desk could look to capitalize, get in touch today.


To trade, or open a new account, contact the Unum Capital Trading Desk:


E-Mail: tradingdesk@unum.co.za | Call: 011 384 2923


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