State of The Markets | Yields Eased As Feds Plan To Slow Rates


Yields eased as Feds plan to slow rates . US stocks rallied higher on Wednesday after minutes of the FOMC meeting indicated that the majority of Feds’ members agreed that a slower pace of rate hike is soon appropriate. Yields eased across the board as Russell (+0.17%), Dow (+0.28%), S&P (+0.59%) and Nasdaq (+0.99%) climbed higher. The 2Y notes dipped below 4.50% and the 10Y benchmark dropped below 3.70% as the Dollar index lost bids and traveled south near the 105.80 barrier.

In the commodity markets, crude oil fell further to $77.60/bl after EIA reports of more than expected inventories build-up while Dollar weakness helped buoy gold back above key level $1,750/oz as the non-interest bearing benefits from slower rate hikes. Similarly, iron ore climbed near $92/tn after stalling around $91.50/tn for a few days.

In the FX space, safe haven Yen shot to demand territories across all horizons as players sold-off King Dollar expecting slower rate hikes from the Federal Reserve. Kiwi and Sterling remained in the demand territories, while Euro moved into the offers.

On Thursday, markets expect to be thin as the US markets closed for the thanksgiving holiday. MFM Team wishes all of our readers in the North American markets a Happy Thanksgiving with family and friends and be thankful for all the blessings that have come this year.

OUR PICK – No New Pick

No new pick amid thin markets. We are still looking to long crude oil and see long potential in precious metal as the Federal Reserve slows the pace of rate hikes. Given thin markets amid Thanksgiving, we stay on the sideline for now.

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