- The ECB raised interest rates by 25 bps, but signaled the end of the hiking cycle, which supports the rebound in the stock market. Lagarde was also dovish at the press conference which was a change in comparison to previous decisions.
- ECB in a statement said that “the governing council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return”
- The end of the hiking cycle in the eurozone may increase the chances that the Fed will keep interest rates unchanged in the next week
- DE30 has rebounded strongly after dovish statements from the ECB. Futures has gained more than 1.3% nominally was a more than 200 point increase.
- EURUSD has dipped strongly after the ECB decision. EURUSD fell below 1.0650 which is the lowest since May
- Futures from Wall Street have also had a good trading session after a rollover of around 1%. Without the rollover, the gains on US100 and US500 were around 0.8%
- Sentiment on tech stocks was boosted by the great debut of Arm stock (British chip maker) on the Nasdaq. The company has gained around 20% from the IPO price of $51
- We got strong data from the US economy: jobless claims at 220,000, retail sales growing by 0.6% m/m (expected: 0.2% m/m), PPI rebounds to 1.6% y/y ( expected 1.2% y/y; previously: 0.8% y/y)
- China cut reserve requirement rate by 0.25 ppt which is another move to boost economic growth. AUD, copper, and Chinese indices rebounded after the decision
- Natural gas inventories increased by 57 billion cubic feet last week which was higher than expected and more than the previous one. Natgas fell close to 2.7 USD/MMBTU
- Stocks in Asia broadly climbed on optimism the Federal Reserve may pause rate hikes. Citi and other huge financial institutions said that the Fed will keep interest rates unchanged next week.
- JAP225 outperformed in the Asian session. Japanese shares received support from the Japanese minister Yoshitaka Shindo who said the government will use all policies for economic management and highlighted the need for strong economic measures.
- The gold price has managed to climb, although tested $1900 per ounce today due to a strong decrease in EURUSD. The price of gold rebounded as the ECB is done with hikes and the Fed will probably keep interest rates unchanged
- Oil WTI has climbed above 90 USD per barrel, for the first time since November 2023
EURUSD is the lowest since May, losing around 0.8%. Source: xStation5
