Posted at 22 March 2023 / Categories Market Roundups
Market Roundup
•UK inflation surprise pressures BoE to raise rates again
•Fed hikes rates by 25 basis points
•Treasury yields drop, dollar hits seven-week low
•Canada Feb New Housing Price Index (MoM) -0.1% forecast,-0.2% previous
•US Cushing Crude Oil Inventories-1.558M forecast,-1.916M previous
•US Distillate Fuel Production -0.097M previous
•US Gasoline Production-0.446M previous
•US EIA Weekly Refinery Utilization Rates (WoW) 1.0% forecast, 2.2% previous
•US EIA Weekly Distillates Stocks-1.500M forecast,-2.537M previous
•US Crude Oil Inventories -1.565M forecast,1.550M previous
•US Fed Interest Rate Decision 5.00,5.00% forecast,4.75% previous
Looking ahead Economic Data(GMT)
•No data ahead
Looking ahead Events and Other Releases(GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro gained on Wednesday as dollar weakened after the U.S. Federal Reserve concluded its monetary policy meeting by hiking its key policy rate. The Fed raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets.But in the press conference that followed, Fed Chair Jerome Powell said the central bank was not expecting to cut rates in 2023. Meanwhile, markets remained unnerved by the banking sector turmoil, remained alert to signs of stress elsewhere. The dollar index fell on the Fed's dovish note, shedding 0.62%.The euro touched a near seven-week high at $1.0940. Immediate resistance can be seen at 1.0912(23.6%fib), an upside break can trigger rise towards 1.0937(Higher BB).On the downside, immediate support is seen at 1.0805(5DMA) a break below could take the pair towards 1.0774(5DMA).
GBP/USD: Sterling strengthened against the dollar on Wednesday after the data British inflation unexpectedly rose in February. Data showed British inflation unexpectedly rose to 10.4% in February boosted expectations for a quarter point rate hike at Thursday's Bank of England meeting, lifting sterling. Economists polled had forecast that the annual consumer price inflation rate would drop to 9.9% in February from January's 10.1% and move further away from October's 41-year high of 11.1%. The increase in inflation contrasted with a fall in the U.S. CPI rate to 6.0% in the 12 months to February. Immediate resistance can be seen at 1.2300 (23.6%fib), an upside break can trigger rise towards 1.2334(Higher BB).On the downside, immediate support is seen at 1.2202(5DMA), a break below could take the pair towards 1.2124(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as investors cheered a signal by the Federal Reserve that it is nearing a pause in its tightening campaign. In domestic data, new home prices fell 0.2% month-over-month in February following a similar decrease in January as the rapid increase in mortgage rates over the last year slowed housing demand.The price of oil , one of Canada's major exports, settled 1.8% higher at $70.90 a barrel, helped by a weaker U.S. dollar. The Canadian dollar was trading 0.4% higher at 1.3660 to the greenback , approaching its strongest level in recent weeks .Immediate resistance can be seen at 1.3765(23.6%fib), an upside break can trigger rise towards 1.3793 (16th March high).On the downside, immediate support is seen at 1.3712 (5DMA), a break below could take the pair towards 1.3670 (38.2%fib).
USD/JPY: The dollar declined against yen on Wednesday after the U.S. Federal Reserve raised its key rate by a quarter of a percentage point, as widely expected, and pointed to just one more rate hike this year.The Fed projected at least one additional interest rate increase of 25 basis points by the end of 2023, but suggested that could represent at least an initial stopping point for the rate hikes. Markets had projected a quarter-point rise in U.S. rates, but investors were also paying close attention to Fed Chair Jerome Powell's comments about the crisis that has rattled global banks this month. The dollar fell 0.82% against the Japanese yen. Strong resistance can be seen at 131.65(5DMA), an upside break can trigger rise towards 132.67 (23.6%fib).On the downside, immediate support is seen at 131.05(38.2%fib), a break below could take the pair towards 130.52(Lower BB).
Equities Recap
European stocks edged higher on Wednesday, extending gains for a third day, amid turmoil in the banking sector.
UK's benchmark FTSE 100 closed up by 0.41percent, Germany's Dax ended up by 0.14 percent, France’s CAC finished the day up by 0. 26 percent.
Wall Street gyrated to end sharply lower on Wednesday after the U.S. Federal Reserve delivered a widely expected 25 basis point policy hike, while hinting that it was on the verge of pausing future increases in view of recent turmoil in the financial sector.
Dow Jones closed down by 1.63 percent, S&P 500 ended down by 1.65 percent, Nasdaq finished the day down by 1.60 percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday after the Federal Reserve raised interest rates by 25 basis points, as was widely expected, and said policymakers believe beating back inflation may require only one more rate hike this year.
Benchmark 10-year note yields were last at 3.502% and two-year yields were 3.989%.
Commodities Recap
Gold prices climbed on Wednesday after the U.S. Federal Reserve toned down its aggressive approach to reining in inflation in a widely anticipated policy statement, and indicated that an end to interest rate hikes was on the horizon.
Spot gold was up 1.7% at $1,973.52 per ounce by 3:56 p.m. EDT (1956 GMT), after advancing as much as 2%. U.S. gold futures settled 0.4% higher at $1,949.60 before the Fed announcement.
Oil prices rose about 2% to a one-week high on Wednesday as the dollar slid to a six-week low after the U.S. Federal Reserve delivered an expected small rate hike while hinting that it was on the verge of pausing future increases.
Brent crude futures rose $1.37, or 1.8%, to settle at $76.69 a barrel, while U.S. West Texas Intermediate crude (WTI) ended $1.23, or 1.8%, higher at $70.90.2%