GS Morning Market Update

This report provides a morning briefing on US Fed policy expectations, a shift in FX strategy favoring carry-trade adjustments, and continued bearishness on the Japanese Yen. It also outlines key economic events for the week ahead.

Key Takeaways

• 1.The Fed is likely to hold rates steady in July, with the September meeting remaining the focal point for any potential rate policy changes.
• 2.Goldman Sachs anticipates continued JPY weakness, revising their USD/JPY forecast path upward to 162, 163, and 165.
• 3.A 'Divided Dollar' environment persists, where the USD remains strong against low-yielders while the firm has made adjustments favoring high-yielders like INR and COP.

Table of Contents

• Connecting You to GS: Thoughts from The Floor
• FX STRATEGY (TRIVEDI / CAHILL) – FX Trader: Halftime Adjustments
• FX STRATEGY (FISHMAN) – More JPY Weakness to Come Without a Shift in the Macro Backdrop
• Week Ahead Previews

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