Economic Indicators & Central Banks:
The Fed signalled that rate cuts are still in the cards, stock markets rallied, Treasury yield were lower and the US Dollar was down from earlier highs.
- DOT PLOT: Fed keeps rates on hold and signals 75 basis points of cuts this year! – 9 officials out of 19 expressed the need of 3 rate cuts, and 1 expects 4 rate cuts. For the remainder of the 2024 forecasts, 5 expect two rate cuts, 2 expect one rate cut, and 2 expect no cuts.
- The Fed left policy unchanged, as expected. And although the revisions on the Fed funds path, as well as on the economy and inflation were all hawkish, Chair Powell said “the story is the same one,” meaning rate cuts are still in the cards and the Fed is confident it will achieve its objectives over time.
- Australia: Robust jobs data released this morning supported Aussie, with 116,500 roles added to the economy in February.
- New Zealand: The GDP showed the country unexpectedly fell into a recession in the second half of 2023.
- Today’s round of European central bank decisions includes BoE, SNB and Norges Bank!
Market Trends:
- Asian shares rallied to their highest in 2 years. The Nikkei and Hang Seng surged more than 2% and the ASX gained 1.1%.
- The optimism in other markets is set to spill over into European trading. The Euro Stoxx 50 future is up 1.2% and US futures are broadly higher.
- Wall Street surged with the NASDAQ (US100) rising 1.3% for its first record high close since March 1. All Magnificent Seven stocks advanced. The S&P500 (US500) climbed 0.89% to 5224, the first time with a 5200 handle, and the Dow advanced 1.03% to 39,512.
Financial Markets Performance:
- The US Dollar slumped marginally with the USDIndex sliding to 102.80 at the close after testing 103.80 earlier.
- JPY, AUD and NZD reverted some losses gaining some ground against the US Dollar.
- Gold climbs to record high above $2200 in sudden spike – due to to growing expectations of US interest rate cuts, which would make the non-yielding asset relatively more attractive, Chinese purchases, geopolitics turn investors to the haven asset.
- USOIL fell to $80.88.
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Andria Pichidi
Market Analyst
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