Todays’ Market Summary
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Today, the US dollar index is slightly reduced for the 2nd day in a row.
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Yesterday, US stock indices rose.
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On Tuesday, oil prices fell for the 2nd day in a row.
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Quotes of precious metals fell yesterday for the third consecutive day.
Top daily news
Market participants did not come to a consensus on the actions of the American regulator. U.S. The Federal Reserve may raise the rate (0.25%) at today’s meeting either by 0.25% or by 0.5% at once. This morning, the prevailing view is that the rate will rise by only 0.25%. Against this background, stock index futures are growing and the US currency is slightly weakening. Oil fell due to several reasons. The main one is the risk of a reduction in global demand for hydrocarbons due to a new epidemic of coronavirus in China.
Forex news
| Currency Pair | Change |
|---|---|
| EUR USD | +0.06% |
| GBP USD | +0.03% |
| USD JPY | +0.07% |
Today, the US dollar index is slightly reduced for the 2nd day in a row. Market participants did not come to a consensus on the actions of the American regulator. U.S. The Federal Reserve may raise the rate (0.25%) at today’s meeting both by 0.25% and immediately by 0.5%. In any case, it will still be well below inflation, which hit a 40-year high and hit 7.9% y/y in February. In 2022, investors do not exclude a further gradual increase in the Fed rate to 2% by the end of the year. For a more significant strengthening of the US currency, a slowdown in the growth of consumer prices is necessary. For now, this is not happening. The United States Consumer Price Index has been rising steadily since May 2020. An additional negative for the US dollar was yesterday’s data on the rise in the producer price index (U.S. Producer Price Index) to 10% y/y in February. This morning in Japan came out weak data on foreign trade for February. The seasonally adjusted (Adjusted) trade deficit amounted to -1.03 trillion yen and approached the maximum of May 2020 (the beginning of the coronavirus epidemic). This could negatively affect the yen.
Bitcoin has been trading in a relatively narrow range around $40,000 for 4 weeks now. Restrictions imposed by Western countries on Russian miners and players have caused a general decline in the activity of the crypto market. UK-based blockchain firm Elliptic has reported the discovery of significant crypto assets that could be linked to Russian owners subject to Western sanctions.
Stock Market news
| Indices | Change |
|---|---|
| Dow Jones Index | +1.82% |
| S&P 500 | +2.14% |
| Nasdaq 100 | +2.92% |
| US Dollar Index | -0.16% |
Yesterday, US stock indices rose. This was facilitated by the correction of world prices for oil and other raw materials. Investors also reacted positively to the slowdown in the PPI growth in February in monthly terms to 0.8% from 1.2% in January. They believe that the Fed’s rate hike will not have much of a negative impact on corporations against the backdrop of a powerful rise in the cost of industrial products. In addition, now most investors are hoping that the rate hike will be 0.25% rather than 0.5%. Against this background, this morning the US dollar index is falling and futures for stock indices are growing. Starbucks shares rose nearly 5% on plans to install electric vehicle charging stations at its cafes and restaurants. In addition to the Fed meeting, today the US will publish economic data on retail sales in February and business inventories in January. Forecasts are moderately positive.
Commodity Market news
| Commodities | Change |
|---|---|
| WTI Crude | +2.22% |
| Brent Crude Oil | +3.04% |
| Natural Gas Prices | +3.59% |
| COPPER | +0.91% |
On Tuesday, oil prices fell for the 2nd day in a row. The main reason for this was the new spread of the coronavirus in China, which is the world’s 2nd oil consumer after the United States. Market participants fear that the Chinese authorities will impose a quarantine and this will reduce global demand for oil. Russia has held talks with Iran and said it is in favor of an early lifting of Western sanctions against Iran imposed because of the “nuclear deal”. This may increase the production of Iranian oil. An additional negative factor was the announcement by the American Petroleum Institute of an increase in US oil inventories by 3.8 million barrels over the week. Their growth is observed for the 2nd consecutive week.
Quotes of wheat and corn rose yesterday due to the lack of much progress in the talks between Russia and Ukraine. These two countries account for 25% of world wheat exports and 16% of corn. Risks of reduced export supplies of grain caused an increase in prices for rice.
Gold Market News
| Metals | Change |
|---|---|
| Gold | -0.64% |
| Silver/US Dollar | -0.33% |
Quotes of precious metals fell yesterday for the third consecutive day. This is facilitated by the growth in the yield of 10-year U.S. Treasury to almost 2.2% y/y, the highest since May 2019. Recall that at that time gold was noticeably cheaper than it is now. It cost about $1,300 per ounce, but inflation in the US was also much lower than the current one, at 1.8% y/y. Investors are expecting today’s Fed rate hike. An additional negative factor was the announcement of the Bank of Russia (central bank of the Russian Federation) to suspend the purchase of gold from Russian banks from March 15. This is done so that they would start selling the precious metal to the population. It is possible that against the background of such a decision by the Central Bank of the Russian Federation, part of Russian commercial gold hit the world market.
https://www.ifcmarkets.com/en/market-overview/starbucks