Economic Indicators & Central Banks:
- As the Fed maintained a “high-for-longer” stance, stocks gave up their gains with attention turning back to earnings.
- Chair Powell and the Fed were not as hawkish as feared and the markets reacted immediately and in textbook fashion to the still dovish policy stance.
- The Fed flagged that recent disappointing inflation readings could make rate cuts a while in coming, but Fed chief Jerome Powell characterized the risk of more hikes as “unlikely,” giving some solace to markets.
- Stocks traded mixed across Asia, while in Europe, DAX and FTSE futures are finding buyers and US futures are also in demand, after the Fed’s message.
- Yen: Another suspected intervention by authorities, this time in late New York trading, ran into resistance from traders keen to keep selling the currency.
- Swiss CPI lifted to 1.4% y/y in April from 1.0% y/y in the previous month. Headline numbers are still at low levels and base effects play a role, with the different timing of Easter this year also likely to distort the picture. That said, the numbers may not question the SNB’s decision to cut rates, but they do not support another rate cut in June.
Financial Markets Performance:
- The USDIndex has corrected to 105.58, but USDJPY is already inching higher again, after a sharp drop to a low of 153.04 on Tuesday that sparked fresh intervention speculation. The pair is currently trading at 155.38.
- Treasury yields plunged and were down over double digits before profit taking set in.
- USOIL finished with a -3.6% loss to $79.00, the lowest since March 12. Currently it is as $79.53.
- Gold was up 1.4% to $2319.55 per ounce, reclaiming the $2300 level.
Market Trends:
- Wall Street climbed initially with gains of 1.4% on the NASDAQ, 1.2% on the Dow, and 0.96% on the S&P500. The NASDAQ and S&P500 closed with losses of -0.3%, while the Dow was 0.23% firmer.
- The Hang Seng rallied more than 2%, and the ASX also posting slight gains, while CSI 300 and Nikkei declined.
- Apple’s earnings report is due after the US market closes today, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market.
Click here to access our Economic Calendar
Andria Pichidi
Market Analyst
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