Daily summary: Fed Chair Powell cools expectations for March rate cut

• FOMC left interest rates unchanged in the 5.25-5.50%, in-line with expectations
• Reference to additional policy firming was removed from FOMC statement but it was noted that a greater confidence on inflation returning to goal is needed before cutting rates
• Fed Chair Powell said during the post-meeting press conference that he does not see it as likely that FOMC will have enough confidence by March meeting to cut rates
• Money markets are now seeing May meeting as more likely for the first rate cut
• Wall Street indices deepened declines following Powell's press conference. S&P 500 trades 1.2% lower, Nasdaq drops 1.7% and Russell 2000 declines 1.6%. Dow Jones is an outperformer and drops 'only' 0.5%
• USD and JPY are the best performing major currencies, while AUD and NZD are lagging the most
• European stock market indices traded lower today - German DAX dropped 0.40%, UK FTSE 100 moved 0.47% lower, French CAC40 declined 0.27% and Dutch AEX closed 0.30% lower. Polish WIG20 was outperformer with an almost 2% gain
• EIA said that US crude oil production increased 0.6% in November to a record 13.31 million barrels per day
• ADP report for January showed a 107k increase in US employment (exp. 145k)
• DOE report showed a 1.23 million barrel build in US oil inventories (exp. -0.2 mb), a 1.16 million barrel increase in gasoline inventories (exp. +1.5 mb), while distillate inventories dropped by 2.54 million barrels (exp. -0.5 mb)
• Canadian GDP expanded by 0.2% MoM in November (exp. 0.1% MoM)
• German CPI inflation slowed from 3.7% YoY to 2.9% YoY in January (exp. 3.0% YoY)
• French CPI inflation slowed from 3.7% YoY to 3.1% YoY in January (exp. 3.3% YoY)
• German retail sales declined 1.6% MoM in December (exp. +0.7% MoM)
• Japanese industrial production increased 1.8% MoM in December (exp. 2.5% MoM) while retail sales were 2.9% MoM lower (exp. +0.2% MoM)
• Australian CPI inflation slowed from 5.4% YoY to 4.1% YoY in Q4 2023 (exp. 4.3% YoY)
• Chinese manufacturing PMI moved from 49.0 to 49.2 in January (exp. 49.2) while services index moved from 50.4 to 50.7 (exp. 50.6)

EURUSD made a brief break below the 1.0815 support zone during the Powell's press conference but has since recovered part of the losses. Source: xStation5