Powell said that the Federal Reserve (Fed) will slow down the pace of rate hikes from next month, while insisting that smaller increases are less important than how much further to go and for how long.
But all investors heard was ‘the Fed will hike by 50bp next month and bla bla bla…’
US yields and the dollar fell, equities rallied!!!
Forex
The US dollar’s depreciation is being cheered across the market.
The EURUSD pushed above the 200-DMA as the dollar-yen fell to 136.50.
And if Japan doesn’t need to spend its FX reserves to strengthen the back of the yen, they could well use it to increase the defense spending, without increasing taxes and without cutting spending.
Japan
And Japan is not the only country that increases defense spending. Bigger global budget for spending boosts defense stocks!
Commodities
In commodities, American crude rallied past the $81pb yesterday as US crude oil inventories fell by 12.6 million barrels last week, well above the 3.2 million barrel draw expected by analysts. It is because exports ran hot, and refineries hit their highest capacity since August 2019.
But be careful with the rising recession odds, because investors have been cutting their net speculative positions despite the supply concerns, and that’s probably going to limit the topside potential!
Watch the full episode to find out more!
- 0:00 Intro
- 0:28 Investors don’t want to hear what Powell tries to say!
- 3:49 FX & data roundup
- 6:50 Defense stocks to continue outperform
- 7:56 Crude oil jumps but positive potential is limited
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
#Powell #speech #USD #economic #data #ADP #JOLTS #GDP #NFP #unemployment #EUR #inflation #TTF #natgas #crudeoil #defense #stocks #Themes #trading #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
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