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5:40 PM · 14 April 2023

Daily Summary: FED 25pb rate hike still on the table

  • US stocks and bonds dipped on Friday due to concerns about inflation and the possibility of two more interest rate increases by the Federal Reserve this year. Markets predict 81% probability for 25pb rate hike by FED at the meeting at the beginning of May.

  • The Fed's battle with inflation has fueled hawkish bets, with some experts calling for a quarter-point increase at the May meeting followed by a pause.

  • Inflation expectations jumped in April with consumers seeing prices climbing 4.6% on one a year outlook, up from 3.6% in March, according to a University of Michigan survey.

  • JPMorgan, Citigroup, and Wells Fargo are benefiting from higher interest rates that have hurt smaller lenders which experienced a flood of deposits withdrawals. Financial related stocks are surging after JPMorgan Chase & Co. (JPM.US) and Citigroup Inc. (C.US) kicked off a busy earnings season.

  • The dollar came into strength again appreciating against many trading pairs while gold futures tumbled currently trading near psychological $2000 level.

  • The US.500 and US.100 both fell by 0.7% and 0.8% respectively, with tech stocks particularly affected.

  • Cryptocurrency market rally extends with BTC breaking through 30K and ETH trading above $2000. Negative information coming from markets cooled down the bulls, but not enough to cause a deeper correction.

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