It was a wild Tuesday ahead of today’s FOMC decision. Both bonds and stocks closed lower as the Fed is widely expected to formulate a rate hike strategy with a 25 bp liftoff in March. Excessive apprehension over a 50 bp move and perhaps a string of 4 to 5 increases this year is gone, though we suspect the markets are in too weak a position. We expect the policy statement and Fed Chair Powell’s press conference to be less hawkish than expected, thus setting the markets for a bit of a relief rally.
So far, Bonds struggled, stocks hit again in the US session but weakened in the Asian session, and FX markets remained in a narrow range as markets waited for the FOMC and BoC. Australia is on holiday, made up for relatively lower volumes, but it is largely the upcoming FOMC announcement that has put a cap on the markets. Tensions in Ukraine and speculation over gas supplies to Europe in the case of an increase in tensions in Russia weighs on emotions. UK PM Boris Johnson now has to answer to the police about the “party gate”, with calls for him to resign growing louder.
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USD (USDIndex 96) continuous incline-3rd day above 20-DMA.
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Ang 10-year Treasury the rate rose 0.4 bp to 1.773%. Ang 10-year JGB The rate is also slightly higher, but the 2-year paper has found buyers as the The BoJ summary shows commitment to loose policy. – The bank’s stance is focused on providing the stimulus to reach the 2% inflation goal.
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The $ 55 billion 5-year Treasury auction is very strong.
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Equities – Ang USA100’s -3.18% decreased the pace of weakness, followed by a -2.8% loss in USA500 and a -2.3% rejection of USA30. now, Force at Nikkei naitama -0.25% at -0.44%, GER40 at UK100 futures rose 0.66% and 0.84% respectively, while the Euro Stoxx 50 is 0.7% higher.
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Revenues: General Electric, beat on earnings but missed earnings, which was very heavy while American Express provided upside support to solid income led by record credit card spending. Microsoft beating expectations at $ 18.8bn in revenue.
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Central banks are clearly nervous about the risk of second -round effects, but the IMF growth is declining also featured yesterday the dangers from slowing momentum in China and virus development.
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USOil – until $ 84.60 – API data shows falling US crude stocks, Biden threatens sanctions on Putin in any aggression, markets await Fed update, US approves oil exchange from strategic reserve. The Houthi movement aligned with Yemen’s Iran has launched a missile attack on a United Arab Emirates-based US military host.
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gold – down to $ 1844 from $ 1854.
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Bitcoin sa $ 37,000 hold.
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FX markets – USDJPY steady at 113.95. EURUSD sa 1.1295 at Cable sa 1.3500.
European Open -Bund futures are under pressure, while US futures are moving higher, while in cash markets, German 10 -year Bund yield rose 0.4 bp to -0.08%. BTPs are supported and incoming spreads.
Today – Included today BoC at FOMC result, the income calendar is heavy. The slate now features several big things, including Tesla, Abbott Labs, Intel, AT&T, Boeing, Anthem, ServiceNow, ADP, Lam Research, Crown Castle, Norfolk Southern, Freeport-McMoran, Progressive, Kimberly-Clark, Amphenol, Ameriprise, Corning, Nasdaq, Hess, Teradyne, Seagate, United Rentals, Raymond James, and Teledyne. The data includes December advance goods trade report
Largest FX Mover @ (07:30 GMT) CADCHF – It broke 0.7300 (R1) from 0.7195 lows on Monday. Fast MAs are aligned with the lower intraday with all momentum indicators even higher.
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