Market overview

• Fed announces biggest rate hike since 1994

• Powell: does not expect 75 bps to be the norm

• S&P 500 posts five-game losing streak

• US crude production hits highest level since April 2020

• Gasoline stocks after a surprise levy

• Canada Housing starts in May 287.3,000, 252.6,000 forecast, 267.3,000 previous

• US Import Price Index in May (monthly) 0.6%, 1.1% forecast, 2.9% previous

• US Retail Sales in May (monthly) -0.3%, forecast 0.2%, previous 0.9%

• May US Core Retail Sales (monthly) 0.5%, 0.8% forecast, 0.6% previous

• US Export Price Index in May (monthly) 2.8%, 1.3% forecast, 0.6% previous

• US Jun NY Empire State Manufacturing Index -1.20, 3.00 forecast, -11.60 previous

• US May Retail Control (MoM) 0.0%, 0.5% forecast, 1.0% previous

• Inventories of US retailers in April excluding autos 1.7%, 1.7% previous

• US Business Inventories in April (monthly) 1.2%, 1.2% forecast 2.0% previous

• Crude oil inventories in the United States 1.956 M, -1.314 M forecast, 2.025 M previous

• US Gasoline Inventories -0.710M, Forecast 1.066M, Previous -0.812M

• US Fed Interest Rate Decision 1.75%, forecast 1.50%, previous -1.00%

Forward-looking economic data (GMT)

•01:30 Australia House Price Index (TQ) (Q1) 1.4% forecast, 4.7% previous

•01:30 Australia May Participation Rate 66.4% forecast, 66.3% previous

•01:30 Australia May Full Employment Change 92.4K previous

•01:30 Australia Unemployment rate in May 3.8% forecast, 3.9% previous

• 01:30 Australia May Employment Change 25.0K forecast, 4.0K previous

Future Outlook – Events, Other Releases (GMT)

• No significant event

Currency summaries

EUR/USD: The euro rose slightly on Wednesday as the dollar fell after the Federal Reserve raised interest rates by 75 basis points in a historic move to fight inflation and forecast a slowdown in economy and an increase in unemployment in the coming months. The rate hike was the biggest by the US central bank since 1994 and came after recent data showed little progress in its battle against inflation. Against a basket of currencies, the dollar was down 0.50% at 104.76, after climbing as high as 105.79, its highest level since December 2002, immediately after the Fed’s decision. With renewed selling pressure on the Dollar, the Euro gained 0.36% to $1.0458. Immediate resistance can be seen at 1.0499 (38.2% fib), a break up can trigger a rise towards 1.0587 (50% fib). On the downside, immediate support is seen at 1.0395 (23.6% fib), a break below could take the pair down to 1.0361 (BB ​​lower).

GBP/USD: The pound on Wednesday recovered from its lowest level against the dollar since March 2020, a day before the Bank of England’s rate decision, but the reprieve could prove temporary due to the slowing economic growth and rising post-Brexit tensions. Britain’s growth outlook is seen as among the weakest for rich countries in 2023, and there is uncertainty about how quickly the Bank of England (BoE), which is expected to raise its bonds again interest rate Thursday, may tighten policy this year to control inflation without further harming the economy. The pound, which dipped below $1.20 on Tuesday for the first time since the COVID-19 crash in March 2020, rebounded more than 1% on Wednesday and rose to $1.2181. Immediate resistance can be seen at 1.21194 (5DMA), an upside break may trigger a rise towards 1.2252(50%fib). On the downside, immediate support is seen at 1.2135(38.2%fib), a break below could take the pair towards 1.2002((23.6%fib).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the currency recovered from a one-month low following the Federal Reserve’s decision to raise interest rates by three-quarters of a percentage point. U.S. stocks recouped some recent losses, bond yields eased and the safe-haven U.S. dollar lost ground as the Fed announced its biggest rate hike since 1994. At a subsequent press conference, the Fed Chairman Jerome Powell referred to the scarcity of the rate size. increase. Investors fear that the Fed will not be able to control inflation without triggering a recession. The Canadian dollar was trading up 0.7% at 1.2870 against the greenback, after hitting its lowest level since May 13 at 1.2995. Immediate resistance can be seen at 1.2908 (38.2% fib), a break up can trigger a rise towards 1.2980 (BB upper) On the downside, immediate support can be seen at 1.2810 (38.2 %fib), a break below could take the pair towards 1.2768 (23rd May low).

USD/JPY: The dollar stabilized against the dollar on Wednesday as investors cheered the Federal Reserve’s decision to raise interest rates by three-quarters of a percentage point, the biggest increase since 1994. Investors seemed relieved that the U.S. central bank had met market expectations that it will act aggressively to rein in soaring inflation and for now seems content with the Fed’s forecast that the economy is expected to slow over the next few months. next two years. Minutes after the market’s widely predicted rate hike, stocks initially pared gains as investors worried about the prospect of tighter monetary policy tipping the economy into a recession. Strong resistance can be seen at 135.65 (23.6% fib), a break up can trigger a rise towards 136.86 (BB upper). On the downside, immediate support is seen at 132.93 (38.2% fib), a break below could take the pair towards 132.30(14DMA).

Summary of actions

European stocks rallied on Wednesday, with banks leading the gains, after the European Central Bank said its rate-setting board of governors would hold an unscheduled meeting to discuss the recent selloff in US bond markets. State.

Britain’s benchmark FTSE 100 closed up 1.20%, Germany’s Dax ended up 1.36%, France’s CAC ended the day up 1.35%.

The S&P 500 rallied on Wednesday to break a five-session losing slip after a policy announcement from the Federal Reserve that raised interest rates to market expectations as the central bank seeks to combat rising oil. inflation without triggering a recession.

The Dow Jones closed up 1.00%, the S&P 500 closed down 1.46%, the Nasdaq stabilized 2.50%.

Summary of treasury bills

U.S. Treasury yields rose in choppy trade on Wednesday after the Federal Reserve raised its target interest rate by three-quarters of a percentage point, as widely expected.

Benchmark 10-year yields rose to 3.445% and remain below Tuesday’s high of 3.498%, which was the highest since April 2011.

Summary of raw materials

Oil prices fell more than $3 on Wednesday as markets worried about a drop in demand after the Federal Reserve raised interest rates by three-quarters of a percentage point.

Brent futures for August settled down $2.7, or 2.2%, to $118.51 a barrel, after falling to $117.75. U.S. West Texas Intermediate crude for July fell $3.62, or 3.04%, to $115.31 a barrel, after hitting a low of $114.60.

Gold rallied on Wednesday as the dollar and Treasury yields fell after the Federal Reserve announced the biggest hike in U.S. interest rates since 1994 and signaled economic risks.

Spot gold rose 1.4% to $1,833.42 an ounce at 4:09 p.m. EDT (2009 GMT), while U.S. gold futures rose 0.3% to $1,819.60 per ounce.