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NEW YORK (Dow Jones) – In the middle of the week, US stocks show a stronger bias towards opening. All the dominant topic is the US Federal Reserve’s interest rate decision, which will be announced at 20:00 CEST. Given the persistently high inflation, market participants now expect the Fed to raise rates by 75 basis points instead of the recently signaled 50 basis points. The central bank recently made such a big change in interest rates in 1994.
this Financial markets predicted a more aggressive tightening of monetary policy, notes Susannah Streeter analyst of Hargreaves Lansdown. Expectations have increased that monetary policy holders will hit the brakes hard and raise interest rates by 75 basis points to prevent inflation from getting out of hand, the analyst adds. At the same time, there are also concerns that the Fed is holding back economic growth and causing a recession, which in turn would have serious repercussions on global economic growth. Streeter expects upset levels to continue to be high.
Before the Fed’s decision, however, investors have to face other economic data: the Empire State index rebounded in June, but remained in negative territory, contrary to expectations, at 0.00. Import prices rose less than expected in May. Retail sales fell slightly last month, while economists expected a slight increase. The April inventory status will be posted later.
The EU court’s decision supports Qualcomm
Corporate news is rare on Wednesday. Qualcomm surged 1.7 percent ahead of the market after the European Court of Justice overturned a multi-billion EU fine on a chip manufacturer. Zendesk shares increased by 3.1 percent. A software development company is in talks with activist investor Jana Partners after a sale failed. Car rental Hertz (+ 5.4%) announced another $ 2 billion share buyback, just seven months after the previous one.
The dollar is slightly weakening despite expectations for rate hikes. The dollar index fell by 0.2 percent. If there were indeed a 75bp rate hike, the US currency is likely to continue to weaken, in line with the motto “buy the rumor sell the fact”, ING predicts. This reaction is likely to be temporary, however, as the dollar will benefit from higher interest rates in the long run.
In the bond market, prices are rising again after the recent sell-off. On the other hand, yields are falling, although they are still at their long-term highs. Gold is gaining more noticeably. Falling bond yields make the non-interest bearing precious metal more attractive again. In addition, a weaker dollar makes gold cheaper for buyers other than the dollar.
The weakening dollar also eases the selling pressure on the oil market. There, prices are falling after the API industry association unexpectedly announced an increase in US crude oil inventories last night. Stakeholders are eagerly awaiting the official data of the State Administration of Energy Information on Wednesday.
Term Profitability Bp to VT Profitability VT +/- Bp YTD
2 years 3.32 -9.5 3.42 259.3
5 years 3.47 -12.4 3.59 220.7
7 years 3.46 -12.4 3.58 201.8
10 years 3.37 -10.9 3.48 186.0
30 years old 3.37 -5.5 3.43 147.2
FOREX last +/-% Wed 8:38 Tue 17:20% YTD
EUR / USD 1.0433 + 0.2% 1.0444 1.0416 -8.2%
EUR / JPY 140.42 -0.6% 141.21 140.46 + 7.3%
EUR / CHF 1.0419 -0.2% 1.0467 1.0424 + 0.4%
EUR / GBP 0.8632 -0.6% 0.8719 0.8672 + 2.7%
USD / JPY 134.61 -0.7% 134.98 134.86 + 16.9%
GBP / USD 1.2083 + 0.7% 1.2002 1.2010 -10.7%
USD / CNH (offshore) 6.7199 -0.5% 6.7206 6.7562 + 5.8%
BTC / USD 21 114.41 -1.9% 21 102.09 22 397.34 -54.3%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 118.56 118.93 -0.3% -0.37 + 62.9%
Brent / ICE 120.79 121.17 -0.3% -0.38 + 60.1%
METALS last day before +/-% +/- USD% YTD
Gold (spot) 1,833.32 1,808.40 + 1.4% +24.92 + 0.2%
Silver (Spot) 21.66 21.11 + 2.6% + 0.55 -7.1%
Platinum (Spot) 947.95 925.03 + 2.5% +22.92 -2.3%
The future of copper 4.17 4.16 + 0.2% +0.01 -6.3%
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(END) Dow Jones Newswires
June 15, 2022 08:48 ET (12:48 GMT)
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