Federal Reserve hikes rates by 25 bps to 5.25% and signals a pause

Posted on by Vrasidas Neofytou

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The world’s largest central bank -Federal Reserve- raised its fed funds borrowing interest rate by 25 bps to a target range of 5% to 5,25% on Wednesday night, as widely expected, putting them at their highest level since August 2007.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The world’s largest central bank -Federal Reserve- raised its fed funds borrowing interest rate by 25 bps to a target range of 5% to 5,25% on Wednesday night, as widely expected, putting them at their highest level since August 2007.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

JP Morgan purchases the collapsed First Republic Bank

Posted on by Vrasidas Neofytou

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The fresh trading week started with an important announcement saying that the U.S. giant lender JP Morgan purchased the battered U.S. regional lender First Republic Bank (FRC).

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The fresh trading week started with an important announcement saying that the U.S. giant lender JP Morgan purchased the battered U.S. regional lender First Republic Bank (FRC).

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Australian dollar rallies over 1% after an unexpected 25 bps rate hike by RBA

Posted on by Vrasidas Neofytou

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

Aussie rallies across the board after the Reserve Bank of Australia unexpectedly hiked its cash target rate by 25 basis points, to 3.85% on Tuesday morning, surprising forex investors when most had expected a pause in the rate hike cycle as it was the case in the previews meeting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

Aussie rallies across the board after the Reserve Bank of Australia unexpectedly hiked its cash target rate by 25 basis points, to 3.85% on Tuesday morning, surprising forex investors when most had expected a pause in the rate hike cycle as it was the case in the previews meeting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

Nasdaq jumps 2.5% on tech rally despite a weaker U.S. GDP reading

Posted on by Vrasidas Neofytou

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Meta jumped nearly 14% higher to $238 a share, helping Nasdaq Composite to post its best trading session since March. Meta reported quarterly results that beat on both the top and bottom lines, and the social media giant delivered upbeat guidance, adding to a series of better-than-expected quarterly results from mega-cap tech such as Apple, Alphabet, and Microsoft.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Meta jumped nearly 14% higher to $238 a share, helping Nasdaq Composite to post its best trading session since March. Meta reported quarterly results that beat on both the top and bottom lines, and the social media giant delivered upbeat guidance, adding to a series of better-than-expected quarterly results from mega-cap tech such as Apple, Alphabet, and Microsoft.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Tech-heavy Nasdaq Composite gained 2.5% on Thursday as investors cheered a better-than-expected Q1 earnings report from Facebook-parent company Meta Platforms Inc, which triggered a rally across the board, despite weaker U.S. GDP data, and fears of slowing economic growth.

Meta jumped nearly 14% higher to $238 a share, helping Nasdaq Composite to post its best trading session since March. Meta reported quarterly results that beat on both the top and bottom lines, and the social media giant delivered upbeat guidance, adding to a series of better-than-expected quarterly results from mega-cap tech such as Apple, Alphabet, and Microsoft.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Tech-heavy Nasdaq Composite gained 2.5% on Thursday as investors cheered a better-than-expected Q1 earnings report from Facebook-parent company Meta Platforms Inc, which triggered a rally across the board, despite weaker U.S. GDP data, and fears of slowing economic growth.

Meta jumped nearly 14% higher to $238 a share, helping Nasdaq Composite to post its best trading session since March. Meta reported quarterly results that beat on both the top and bottom lines, and the social media giant delivered upbeat guidance, adding to a series of better-than-expected quarterly results from mega-cap tech such as Apple, Alphabet, and Microsoft.

Meta Platforms share, Daily chart

Dow Jones and S&P 500 indices are on pace for a second positive month in April, managing to recover earlier monthly losses from concerns about the U.S. banking sector, and economic recession.

The prospect of higher interest rates and persistent inflation spurred more concerns over a potential economic slowdown this year, especially ahead of a Federal Reserve meeting next week, where widely expected the Fed to hike rates by 25 basis points to curb inflation.

Another factor that boosted risk sentiment on Thursday was the 8% gains on the shares of beleaguered regional bank First Republic amid a search for a recovery strategy. The stock has plunged over 60% since Monday after the release of its first-quarter results, which showed that deposits shrank by about 40% in the first three months of the year.

First-quarter GDP increases at a 1.1% rate:

All three major equity indices rallied on Thursday despite data showing that the U.S. GDP gross domestic product grew slower than expected last quarter, as investors focused on the above-forecast inflation number and an acceleration in consumer spending.

According to the data, gross domestic product increased at a 1.1% annualized rate last quarter vs a rise of 2% expectation, due to a decline in private inventory investment, while the economy grew at a 2.6% pace in the fourth quarter.

As a result of the stronger-than-expected U.S. inflation and labor market data, it is widely expected that the Federal Reserve to hike rates by 25 basis points at the next FOMC monetary policy meeting of May 02-03.

Euro hits a 13-month high of $1.11 on ECB-FED monetary divergence

Posted on by Vrasidas Neofytou

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

EUR/USD pair, Weekly chart

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

EUR/USD pair, Weekly chart

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

EUR/USD pair, Weekly chart

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

The shared currency hit a 13-month high of $1.11 against the dollar on Wednesday afternoon given the recent weakness on the greenback, the soaring U.S. banking concerns, and the monetary policy divergence between the ECB and Federal Reserve.

EUR/USD pair, Weekly chart

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

The shared currency hit a 13-month high of $1.11 against the dollar on Wednesday afternoon given the recent weakness on the greenback, the soaring U.S. banking concerns, and the monetary policy divergence between the ECB and Federal Reserve.

EUR/USD pair, Weekly chart

Euro has been getting support from the resilient economy in Eurozone in contrast to the first signs of contraction in the U.S. economy, the banking crisis, and the prospects for a less hawkish Fed ahead.

Eurozone’s inflation pressure remains strong despite the falling energy prices, forcing European Central Bank to maintain its hawkish monetary stance, while at the same time, U.S. inflation is softening, and with a combination of weaker economic data and earnings, is pressuring Fed to change its stance on the fight against inflation.

The dollar’s weakness supports Euro:

Euro has gained traction this week following the ongoing softens on the dollar, especially after the regional First Republic Bank reported on Monday more than $100 billion in customer withdrawals during the first quarter.

Investors have become sellers of the greenback and buyers of the euro as the sharp loss of nearly 70% on First Republic Bank’s shares since Monday, has resumed concerns about banking contention in the U.S. banking sector, at a time the banking system in Eurozone remains resilient despite record-high rates, inflation, and Ukraine war.

Hence, the greenback’s outlook has turned negative lately as the weaker-than-expected economic data and the softer corporate earnings have elevated fear of a recession in the world’s largest economy.

As a result, the DXY-U.S. dollar index, which tracks the value of the greenback against six major peers (the Euro weighs 57.6% on the index) has retested the yearly lows of 101 this week, coupled with the losses on the U.S. Treasury yields amid uncertainties over the Fed’s monetary actions.

Investors largely expect Fed to hike rates by another 25 bps on the next FOMC monetary meeting on May 02-03, while most of them also expect to pause in June, and start cutting rates after September, which will be positive for Euro.

Crude Oil Outlook for Q2, 2023

Posted on by Vrasidas Neofytou

We remain bullish on the crude oil prices for the second quarter of the year based on the mismatch of the demand-supply oil dynamics given the reopening of China which will boost demand, and the surprising decision from the OPEC+ alliance to further slash output until the end of the year in a bid to avert a further slide in oil prices.

We also remain cautious about the major central banks of the Federal Reserve, ECB, and the BoE potentially raising interest rates to curb persistent inflation, which could slow economic growth and reduce petroleum demand.

Despite the macro factors affecting the price trajectory of the two benchmark oil grades, we believe that the leading price catalyst in the second quarter and as well as in the rest of the year would be the supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, known as OPEC+. The alliance includes 13 OPEC members and 11 non-OPEC members mainly from the ex-Soviet Eurasia region.

In early April, OPEC surprised the market by announcing voluntary output cuts of 1.16 million barrels per day (bpd) from May till the end of 2023, saying that it was a “precautionary” move to support the stability of the oil market after the steep losses in March due to the banking crisis.

Let’s remind that last October, OPEC announced its decision to cut output by two million barrels per day from the August 2022 required production levels, starting November 2022 until 31 March 2023, to trim some surpluses that started to accumulate since mid-2022 due to lower Covid-led global fuel demand.

Adding on the OPEC cuts, Russia also announced on the same day an extension of its 500k bpd production cut until the end of 2023, with the supply cuts totalling around 1.650 million bpd, helping both Brent and WTI crude oil prices to bounce off sharply from yearly lows of $70/b and $64/b respectively, hit after the collapse of the two regional U.S. banks and the recession fears.

Finally, the unexpected decision by the OPEC+ alliance brings the total volume of cuts to 3.66 million bpd including a 2 million bpd reduction in October 2022, representing roughly 3.7% of global demand.

 

Bullish Q2, 2023 Outlook:

Base scenario: Brent crude to trade on an average of $85/b in Q2, 2023

We remain bullish on the crude oil sector as we expect the price of Brent (the benchmark for two-thirds of the world’s oil) to trade at an average of $85 a barrel in the second quarter of the year on the back of the imbalance between demand-supply dynamics.

We expect the global oil market balance to turn into a deficit after May when the supply cuts from OPEC and allies will be fully implemented at a time when demand growth for gasoline and jet fuels will start accelerating amid the beginning of the driving season and summer holiday period in U.S., Europe, and Asia (Northern Hemisphere).

Adding to the above, China, the world’s largest crude oil importer and the second-largest consumer just after the USA, is recovering from its strict 3-year-long Covid-led restrictions. The resumption of business, industrial, and tourism activity and the pending-up demand for traveling, could also boost fuel demand.

Another bullish factor for oil prices is the fact that U.S. SPR inventories are at their lowest levels in forty years, with rumours mounting about the need to refill them soon.

Dollar-denominated crude oil prices could also see further support from a weaker dollar and falling bond yields.  A weaker dollar could also boost global demand for oil by making it cheaper for holders of foreign currencies in other countries.

March’s banking crisis and the softening U.S. economic data could force Federal Reserve to slow down its aggressive monetary tightening to save the local economy from a recession, which in turn, will pressure the greenback lower in favour of crude oil prices.

 

Bullish scenario: Brent crude to climb up to or surpass the $100/b key psychological level

Our bullish case scenario assumes Brent oil prices to reach or even break above the $100/b key psychological level during the second quarter on some unexpected supply disruptions events, geopolitical risks, and a better-than-expected demand from China.

A $100/b projection includes a scenario that a hurricane could impact the oil-rich U.S. Gulf Coast ahead of the start of the U.S. hurricane season, which starts in June and until October.

There has been always a risk that a hurricane could halt the operations of the U.S. Gulf Coast refineries as well as cease the drilling on the offshore oil and gas platforms, which produce up to 15% of total U.S. crude output.

Hence, the surprising supply cut from OPEC+ and the ongoing Ukraine war is expected to intensify geopolitical risks by adding a risk premium on oil prices.

U.S. administration has criticized OPEC+ action given market uncertainty, adding further strain between Western allies-Eurasia ties, which is a bullish event on oil prices given the higher risk for supply disruptions.

Hence, the higher-than-expected recovery growth scenario in China amid successful stimulus measures, and the return to normal mobility without any further Covid outbreaks, could be the leading factors for a surge in China’s oil demand and the push of the price of Brent above the $100/b key level.

 

Bearish scenario: Brent crude to retest $70/b on a weaker fuel demand:

Our bearish scenario assumes Brent oil prices to fall back to Q1’s low of $70/b in case the ongoing aggressive monetary tightening by the central banks to curb inflation, the stronger U.S. dollar and bond yields, the recession fears, or any new collapse in the global banking sector could negatively impact the fuel demand growth despite tight supplies.

The surprising oil output cut from OPEC+ will threaten to strengthen inflation at a time when it was starting to reverse lower after the record-high readings in the preview months, forcing central banks to continue maintaining higher rates for longer.

Based on the above inflation-led assumption, our bearish projection is based on the scenario that higher-for-longer interest rates and negative consumer sentiment from the looming economic and banking crisis could deteriorate the global economic and industrial growth that would, in turn, cut demand for crude oil and petroleum products.

A similar case was seen back in 2008 when the financial crisis and the lower demand crashed the oil prices from record-high levels of $140/b to the lows of $30/b in just a few months in that year.

Finally, higher oil prices will bring fresh barrels into global markets, especially from U.S. Shale producers and from offshore Brazil which could inject over 500k bpd by the end of 2023, pushing lower the oil prices.

Exclusive Change Capital Ltd is regulated by the Cyprus Securities and Exchange Commission (CySEC) under the licence number CIF 330/17. Exclusive Capital Ltd operates in accordance with the Markets in Financial Instruments Directive (MiFID) of the European Union.

Exclusive Change Capital Ltd is incorporated under the laws of Cyprus, with registration no. HE 337858, regulated by CySEC under license no. 330/17 and has its registered address at Theodorou Potamianou 56, 4th Floor, Kato Polemidia, 4155, Limassol, Cyprus

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read our full Risk Disclosure.

The Company's official website of Exclusive Change Capital Ltd is www.exclusivecapital.com and we are not affiliated in any way with other domains or companies.

Restricted Regions: Exclusive Change Capital Ltd, does not provide services to citizens / residents of certain regions, such as Belarus, Belgium, Canada, Cuba, Iran, Iraq, Japan, North Korea, Latvia, Russian Federation, Sudan, Syria, Turkey, The United States and Ukraine.

ISO 27001:2022

The services are delivered under the controls established by information security management systems in conformity with ISO/IEC 27001:2022, and we are certified by MSECB.

Copyright ©️ 2017-2025 Exclusive Change Capital Ltd

facebook twitter linkedin instagram youtube