Ipek Ozkardeskaya
Swissquote Bank Ltd
Yesterday’s Federal Reserve (Fed) decision was relatively hawkish - depending on where you are coming from (I am coming from a bank crisis).
The Fed raised the rates by 25bp, as broadly priced in, but Fed Chair Jerome Powell signaled that there would be another 25bp hike on the wire before this tightening cycle ends. QT and dot plot were unchanged.
Stocks fell, while Treasuries rallied as a sign that not everybody interpreted the Fed decision equally dovish, or hawkish.
US futures are in the positive at the time of recording. It is well possible that the post-FOMC equity selloff quickly reverses, at the falling yields is supportive of equity valuations – if financial stress is contained and economic data is not too bad.
In the FX, the dollar’s sharp fall led to a strong rally in the EURUSD yesterday.
Cable rallied as well, after the latest inflation report fueled the bets that the Bank of England (BoE) has no choice but to hike its policy rate at today’s MPC meeting.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
Recommended Content
Editors’ Picks
EUR/USD remains depressed near 1.0700 ahead of Lagarde, US data
EUR/USD is trading close to 1.0700, on the defensive in the European session. The US Dollar is extending post-US NFP gains amid cautious optimism, as investors assess the Fed rates outlook. Eurozone Sentix data slumps to -17.1 in June. Lagarde, US data awaited.
GBP/USD drops below 1.2400 amid firmer US Dollar
GBP/USD is falling below 1.2400 amid a notable US Dollar demand, dragging the major lower for the second successive day on Monday. Markets repricing of the Fed interest rates outlook push the US Treasury bond yields higher, in turn, the US Dollar. US ISM Services PMI next of note.
Gold finds short-term cushion above $1,940, more downside looks solid
Gold price has found a short-term cushion near $1,943.00, however, more downside seems favored. Gold price witnessed an intense sell-off after a mean-reversion move to near the 200-period EMA at $1,977.32.
Pro-XRP attorney says Ripple has 25% chance of winning against SEC, Judge could announce verdict by September
Ripple has a 25% chance of winning its legal battle against the US SEC, according to pro-XRP attorney John Deaton. Over the weekend, Deaton shared his opinion on Ripple’s likelihood of both an outright win and a partial victory.
Services PMIs the next focus after last week’s bumper US jobs report
While US markets finished the week on a high, after another bumper jobs report and a positive week across the board, markets in Europe, while finishing the week on a high, struggled to match the exuberance of investors on the other side of the Atlantic.