Daily summary: US stocks mixed after FOMC minutes. Oil under heavy pressure

10:32 pm 22 February 2023

  • European indices finished today's session lower with  Stoxx 600down 0.4% dragged down by mining and banks sectors. DAX closed slightly above flatline as German business morale improved further to an eight-month high, while CPI reports from Germany and France suggested inflation in Europe's largest economies will remain high for some time. 
  • Wall Street indices are swinging between gains and losses after publication of latest FOMC Minutes. Few officials favored raising it by 50bps, while all participants continued to anticipate that ongoing increases would be appropriate until data provided confidence that inflation was on a sustained downward path to 2%, which was likely to take some time.

  • Earlier FED Bullard said that the US economy is stronger than policymakers previously thought and the Fed should only slow down once it's got to the terminal rate. Bullard projects rates at 5.375%.

  • Energy commodities trade mixed. Natgas bounced off recent lows around $2.0, while oil fell over 2.5% as recession fears in the US put pressure on prices. Meanwhile Russia intends to reduce crude exports from western ports by a quarter in March/February, while Morgan Stanley has raised its global oil demand forecast for 2023 by 36%, an increase of 1.9 million bpd.

  • Precious metals erased early gains and are trading lower amid a slightly stronger dollar. Gold again approaches the crucial support zone around $1830, while silver once again bounced off resistance at $22.00 and pulled back below $21.60 level. 

  • The Australian dollar is the worst performing G10 currency today, dragged down by disappointing data, however AUDUSD sellers are unable to break below the crucial support zone around the 0.68 mark. NZD strengthened against other major currencies, boosted by RBNZ 50 bp rate hike. EURUSD pair continues to hover above the 1.06 level.

  • RBNZ governor Orr said in the evening that there are some early signs that inflation is abating, however core inflation remains too high.

  • Major cryptocurrencies fell sharply on Wednesday. Bitcoin tested $23,600 level, while Ethereum briefly dropped below $1600 support.

OIL price continues to move within the main downtrend. Recently, buyers again failed to break above EMA 100, which, according to the classical assumptions of technical analysis, points to potential move towards the recent lows. Source: xStation5

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