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FOMC leaves rates unchanged, QE to end in March
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Powell does not rule rate hikes at every meeting
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US indices erase gains
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USD gains, GOLD drops
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BoC leaves rates unchanged
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Brent tests $89 per barrel
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Bitcoin pulls back to $37,000 after test of $39,000
Stock markets in Europe traded higher today with German DAX, French CAC, and Italian MIB gaining over 2%. Russian indices continued to recover with major benchmarks adding over 2-3%. US futures also gained during the major part of the day but things changed following the FOMC decision announcement and Powell's presser. While the Fed decided not to change rates yet, Powell said that rates could be hiked on every meeting if the situation requires it as there is plenty of room for rate hikes without hurting the labour market. US dollar gained on outlook for quicker tightening with EURUSD pulling back from 1.1300 area. Gold was pressured by USD strengthening and broke below the $1,830 support zone after the Fed meeting.
Outside of Fed meeting, investors were also offered a decision from the Bank of Canada today. No change was made to interest rates but just a Fed, BoC said that it would be appropriate to hike them soon. CAD weakened following the decision as rate hike was 70% priced in by derivatives markets.
Microsoft reported solid Q4 2021 earnings providing support for the tech sector during the European session and the first half of the Wall Street session. However, tech indices erased gains following FOMC.
Brent moved above $89 per barrel in spite of an unexpected inventory build signaled by DoE report today. Part of gains was erased later on but crude continues to trade above $88.
Cryptocurrencies traded higher for the large part of the day with Bitcoin testing $39,000 area. However, coins took a hit during FOMC like other risk assets and Bitcoin dropped back to $37,000.
US100 made a failed attempt of breaking above 14,450 pts resistance zone today. Hawkish comments from Powell pressured indices in the evening pushing US100 back to the upward trendline. Source: xStation5
