The dollar has resumed its slide, and not because of the drop in T-Bond yields, which have fallen by just -0.2pts to 3.927%... in other words, perfect stability.

The $-Index is down -0.4% to 102.35, 0.2% from its recent low of 101.95 on 14/12.... a level comparable to August 7.
The Euro is up symmetrically by +0.5% towards 1.0975, the Pound by +0.6% (towards 1.2720), the Swiss Franc by +0.7% towards 0.8608.
If the Dollar Index is not down by more than 0.5%, it's because the Yen is down -on its own- by -0.85% towards 144 (and by -1.25% against the Euro).

Since Friday, several Fed members have tried to temper Wall Street's euphoria by judging market expectations to be too optimistic... but they are not being "heard" and US indices continue to rise stubbornly, as if the warnings were just a smokescreen.

Forex traders seem to be siding with those who anticipate well over 4 rate hikes in 2024 (as opposed to the 3 mentioned by J.Powell).

However, last Friday, New York Fed President John Williams declared that it was "premature" to envisage a Fed rate cut as early as March.

His counterpart at the Atlanta Fed, Raphael Bostic, asserted that there was nothing "imminent" about an easing of US Fed monetary policy, and that in his own judgment, the Fed would do better to content itself with 2 rate cuts to ensure that inflation remains under control.

On the economic front, the surge in housing starts (+14.8%) shows that the US real estate market is behaving paradoxically: first-time buyers are absent, no one is selling their property to buy another at rates twice as high (a shortage situation), so solvent buyers are building homes to their liking, and prices are being driven up, rather than down as the FED expected (perhaps this will happen in 2024).

In fact, US housing permits - which are supposed to be a precursor of future housing starts - fell by 2.5%.

The highlight of the week will be the release of the US PCE inflation index on Friday.

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