It's a holiday in the US today. No stock or bond trading.

to The US and bond markets will be closed in the US today in observance of President's Day (combined Washington's and Lincoln's Birthday's for those wondering). Canada will release Housing starts for January (8:15 AM ET), and Domestic and Foreign Security holdings data for December (8:30 AM ET). PS Parts of Canada (at least) are under a fresh blanket of snow (at least where Adam lives - here is proof from a pic he sent over the weekend. Drive safely).

Although the US markets on Holiday there will be some Fedspeak. Fed's Harker will be speaking from the Bahamas (nice) and Fed's Waller will be in Australia (nice). Fed's Bowman drew the short straw and will be speaking at the American Bankers Convention in somewhere, USA)..

• 9:30 AM ET: Philly Fed President Patrick Harker at Global Interdependence Center event (Bahamas).
• 10:20 AM ET: Fed Governor Michelle Bowman at the American Bankers Association’s Community Bankers Conference.
• 6:00 PM ET: Fed Governor Christopher Waller speaks on the economic outlook at UNSW Macroeconomic Workshop (Australia).

Although, the stock and bond markets may be on holiday, the forex market never sleeps.

The USD is mixed in trading to start the week with the greenback higher vs the EUR (+0.20%), CHF (+0.27%) and CAD(+0.07%), but lower vs the JPY (the biggest mover with a decline of -0.56%), the GBP (-0.06%), AUD (-0.17%), and NZD (+0.09%).

The USD fall vs the AUD and the NZD comes despite the expectations of rate cuts in both those countries this week. This week the FOMC will announce their meeting minutes from the January meeting.

Reserve Bank of Australia:

The Reserve Bank of Australia is expected to cut rates by 25 basis points when the announcer decision on Tuesday morning in Australia (10;30 PM ET today)

The market is pricing an 85% chance of a 25bps cut to 4.10% and a 15% chance of holding at 4.35%. The bank previously held rates steady in December, citing easing inflation risks and a desire for more confidence before reducing rates.

Governor Bullock stated that all options remain open, as the bank awaits further data on inflation and economic trends. Recent soft Q4 inflation data supports a cut, with headline CPI y/y at 2.4% (prev. 2.8%) and Trimmed Mean CPI y/y at 3.2% (prev. 3.5%).

Reserve Bank of New Zealand:

The RBNZ is expected to cut rates by 50 basis points to 3.75% when they announce on Wednesday.

The market is pricing a 68% chance of a 50bps cut and a 32% chance of a 25bps cut, bringing the OCR down from 4.25%. This follows the third consecutive rate cut in November. The central bank has so far cut 25, 50 and another 50 basis points over those 3 meetings.

The RBNZ noted that inflation pressures have eased, global growth remains subdued, and a full recovery is expected by 2025. Their updated forecasts show the OCR at 4.07% in March 2025 (previous: 4.62%) and 3.55% by December 2025.

The NZIER Shadow Board today recommended the RBNZ cut the OCR by 50bps to 3.75%, citing contained inflation, soft economic activity, and a weak labor market. Looking ahead, most members see the OCR between 2.75% and 3.5% in a year, favoring a cautious approach to rate cuts due to risks from US fiscal policies and a weaker NZD. However, two members advocate for a faster pace of cuts given the economy’s weakness.

FOMC Meeting minutes (Wednesday at 2 PM):

In other central bank news this week, the FOMC will announce their meeting minutes from their last meeting. The FOMC kept rates unchanged at 4.25-4.50% in January, with a hawkish stance that removed language suggesting inflation was making progress toward the 2% target. The labor market remains stable, but recent inflation readings, especially in shelter, show progress is slow.

Powell reiterated that the Fed is in no rush to cut rates and remains data-dependent. The Fed is also monitoring fiscal and regulatory changes under President Trump but only from the perspective on how it influences the Fed's mandate on inflation and employment.

Despite Powell’s repeated statements, markets have shifted expectations, now pricing in only 34bps of cuts in 2025, with the first full rate cut expected in October. These minutes do not include recent strong jobs data, hot CPI, and PPI figures, which may further influence policy decisions.

IN other central bank news overnight, ECBs Nagel said that Germany would be hard hit by US tariffs and that the impact on the US could outweigh the benefits to them from the tariffs.

Trump and DOGE sent out pink slips and housing prices are reportedly down -20% over the last few months with listings surging. Pres. Trump and Musk are scheduled to give a joint interview with Fox News on Tuesday (time TBD).