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Indexes on Wall Street are gaining, the standout is the Nasdaq where gains reach over 1%. The S&P 500 and Dow Jones are up 0.4 and 0.2%, respectively, and an important, bull-supporting factor is the declines in oil prices, which mitigate somewhat the impact of hawkish votes from the Fed
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Sentiments in the European session were mixed today, though some benchmarks from the Old Continent managed to erase some losses after the opening of Wall Street. The DAX and FTSE ultimately closed the session nearly flat.
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The WIG20 lost over 0.8% today, and among the companies in the main index, only Pepco Group stood out with gains - investors remain uncertain amid the ongoing political 'suspense' after the mission to form a government was entrusted to Mateusz Morawiecki.
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Several Fed members spoke today about U.S. monetary policy and the economy. Goolsbee essentially reiterated Powell's position and added that a soft landing is still possible, but Neel Kashkari from the Chicago Federal Reserve emphasized that rates may not have reached their peak in this cycle, considering the economy remains persistently strong.
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This hawkish view was supported by Michelle Bowman, who indicated that further U.S. interest rate hikes will be necessary, although it is not entirely clear how this will affect the economy and inflation. Meanwhile, Lorie Logan from the Fed indicated that the current inflation dynamics suggest that it will find its bottom not at 2%, but at 3%, while 'the latest inflation data were too high'.
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The NY Fed report on American households indicated that Americans' savings are shrinking and a significant number of banks in the U.S. tightened credit standards for private clients and businesses in the third quarter, supporting the Fed in the fight against inflation.
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Both WTI and Brent oil lost over 3% today - due to the lack of escalation of the conflict beyond the Gaza Strip, markets are somewhat diverting their attention from the Middle East, resulting in the erasing of part of the 'geopolitical premium' in commodity quotes. At 10:30 PM, the oil market will learn the inventory reading according to API, which may increase volatility.
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The U.S. dollar is erasing some of its earlier gains but is still trading higher, with USDIDX up over 0.3%, EURUSD down 0.3% and quoted just below around 1.069.
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The Reserve Bank of Australia announced today an expected interest rate hike of 25 basis points. It was the first move after four meetings where rates remained unchanged.
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Despite the central bank's decision to raise interest rates, the Australian dollar (AUD) is losing ground and is one of the worst-performing currencies. While the rate hike was a hawkish decision, the rest of the statement suggests that further tightening may not be necessary.
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In the cryptocurrency market, declines prevail today, with Bitcoin losing about 1% and unable to stay above the region of 35,000 USD for long. Other, smaller cryptocurrencies also lose, with Graph's (GRT) price noting double-digit declines today.
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