STATE OF THE MARKETS
Hawkish minutes surprised stocks. US stocks closed in the red on Wednesday, after FOMC minutes revealed a more hawkish Feds. Dow (-1.07%), Nasdaq (-3.34%), and S&P (-1.94%) including Russell (-3.30%) dived towards closing, as yields surged higher. The 10Y benchmark hit 1.70% while the 30Y remained at 2.10% and 2Y at 0.83%, the highest since the pandemic hit, as the Dollar (DXY) stalled at the 96.20 barrier.
In the commodities market, crude advanced past $78.25/bl on strong bids despite the fact of rising inventories in EIA reports. Gold was fixed lower, but remained above the $1,800 major handle as inflation is expected to take center stage this year. Elsewhere, iron ore climbed past at $124.00/tn as investors see BBB taking shape before the US midterm election in November.
In the FX space, overall sentiments were mixed as the safe havens Swiss, Yen and Dollar were all over the place across time horizons. It seemed that short term traders took the extreme overbought in high beta currencies to short and bid more in Euro, Yen and Sterling. On Thursday, markets look forward to seeing the latest earnings report from Walgreens (WBA), Constellation Brands (STZ), Conagra (CAG), Lamb Weston (LW) and Helen of Troy (HELE) as well as US jobless claims and factory orders.
OUR PICK – No New Picks
No new picks until after NFP. FOMC minutes today surprised investors as there are few members who want to end the asset purchase program faster and hike rate earlier than anticipated, in order to tame inflation before it gets too late. Bond markets sold off in response, sending yields higher across the board. Stock markets dived with heavy losses in technology, real estate and communication services, which in our view, signifies remaining markets’ concern on the coronavirus as new lockdowns happened in East Asia.
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This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.