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Data War: NFP and CPI Vs. a Divided Fed (Central Banks' Super Week)
The market is extremely sensitive due to internal divisions within the Fed.
On one side, hawks like Schmid are calling for a restrictive policy.
On the other, doves like Paulson are more focused on the risks to the labor market.
The dot plot, with only one rate cut planned for 2026, is now under review.
This week's topic is
"Validating the Fed Pivot Speed Data."
The direction of the dollar will depend entirely on NFP and CPI.
NFP (Tuesday)
Key labor market indicator after mixed signals from ADP (weak) and Jobless Claims (strong).
Weak NFP
confirms dovish (Paulson) outlook.
Bearish pressure on the dollar.
Strong NFP
confirms the hawkish view (Schmid).
The dollar finds support in the short term.
CPI (Thursday)
Crucial test on inflation.
High CPI
creates a confusing signal, with the Fed already cutting rates while inflation rises.
Strong volatility is possible in the USD and bond yields.
This week sees a significant clash of monetary policies generating high volatility in non-USD pairs.
: Volatile sideways phase likely before NFP and CPI.
Reduce position size.
Trade only on confirmed breakouts after the data.
GBP/JPY Setup:
Dovish BoE risk offset by a potential hawkish BoJ tightening creates a high-conviction divergence trade.
Implied volatility is rising sharply.
Risk Management
With five high-impact events, it is advisable to use GSLO to limit gap risks.
Would a weak number really force the Fed to cut rates sooner than the dot plot suggests?
Are you short GBP/JPY ahead of central bank decisions?
Or do you see a risk that the BoE will delay its rate cut?
If NFP is weak but CPI is high, which number will drive the market?
Can a strong NFP take DXY back above 99.00?
I. Macro focus on the dollar: data confirmation is crucial
A Divided Fed:The market is extremely sensitive due to internal divisions within the Fed.
On one side, hawks like Schmid are calling for a restrictive policy.
On the other, doves like Paulson are more focused on the risks to the labor market.
The dot plot, with only one rate cut planned for 2026, is now under review.
This week's topic is
"Validating the Fed Pivot Speed Data."
The direction of the dollar will depend entirely on NFP and CPI.
NFP (Tuesday)
Key labor market indicator after mixed signals from ADP (weak) and Jobless Claims (strong).
Weak NFP
confirms dovish (Paulson) outlook.
Bearish pressure on the dollar.
Strong NFP
confirms the hawkish view (Schmid).
The dollar finds support in the short term.
CPI (Thursday)
Crucial test on inflation.
High CPI
creates a confusing signal, with the Fed already cutting rates while inflation rises.
Strong volatility is possible in the USD and bond yields.
II. Global monetary policy divergence (FX volatility)
This week sees a significant clash of monetary policies generating high volatility in non-USD pairs.
III. Operational strategy and practical indications
USD Strategy: Volatile sideways phase likely before NFP and CPI.
Reduce position size.
Trade only on confirmed breakouts after the data.
GBP/JPY Setup:
Dovish BoE risk offset by a potential hawkish BoJ tightening creates a high-conviction divergence trade.
Implied volatility is rising sharply.
Risk Management
With five high-impact events, it is advisable to use GSLO to limit gap risks.
Trader Discussion
What's your NFP forecast?Would a weak number really force the Fed to cut rates sooner than the dot plot suggests?
Are you short GBP/JPY ahead of central bank decisions?
Or do you see a risk that the BoE will delay its rate cut?
If NFP is weak but CPI is high, which number will drive the market?
Can a strong NFP take DXY back above 99.00?
