In Asian Equity Markets stocks were mostly up on Wednesday morning, and bonds are under pressure, ahead of the U.S. Federal Reserve’s latest policy decision. Investors are bracing for the biggest interest rate hike since 2000 while awaiting further clues on how aggressively the central bank will tackle inflation. South Korea’s KOSPI inched down 0.03 percent. In Australia, the ASX 200 inched down 0.07 percent, with retail sales figures for March 2022 released earlier in the day. Hong Kong’s Hang Seng Index Index fell 0.99 percent. Chinese and Japanese markets remain closed for a holiday.
In Currency Markets the U.S. dollar edged lower in early European trade Wednesday ahead of the latest Federal Reserve interest rate decision, with caution ahead of the event resulting in tight trading ranges. Euro edged up 0.1 percent to $1.0525, staying marginally above last week’s $1.0470 low, the weakest level since January 2017. The Aussie dollar rose 0.3 percent to $0.7114, maintaining its strength after the RBA hiked interest rates earlier in the week to combat inflation. Sterling fell 0.2 percent to 1.2476, with the Bank of England set to hand down its policy decision a day after its U.S. counterpart.
In US Equity Markets stocks rose on Tuesday after a choppy session in which each of the major indexes fluctuated between gains and losses as a key meeting of the Fed got under way. The Dow rose 0.2 percent, to 33,128.79, the S&P 500 gained 0.48 percent, to 4,175.48 and the Nasdaq Composite added 0.22 percent, to 12,563.76. Nine of the 11 major S&P 500 sectors rose, with energy and financials up 2.9 percent and 1.3 percent, respectively. Estee Lauder Cos Inc lost 5.8 percent after the cosmetics maker cut its full-year profit forecast due to fresh COVID-19 restrictions in China and the Russia-Ukraine crisis.
In Commodities Markets oil prices fell by more than 2 percent on Tuesday as demand worries stemming from China’s prolonged COVID-19 lockdowns outweighed the prospect of a European embargo on Russian crude. Brent crude settled down 2.4 percent, at $104.97 a barrel. U.S. West Texas Intermediate crude ended 2.6 percent, lower at $102.41. Spot gold was up 0.4 percent at $1,870.56 per ounce. Spot silver fell 0.1 percent to $22.60 per ounce. Platinum firmed 3 percent to $962.93, and palladium rose 2.1 percent to $2,262.84.
In European Equity Markets stocks rose on Tuesday after a string of upbeat earnings, while banking shares gained as government bond yields hit fresh highs in anticipation of quicker interest rate hikes by global central banks to tackle rising inflation. The pan-European STOXX 600 index climbed 0.5 percent, rebounding from a “flash crash” in the previous session caused by a single sell order trade by Citigroup Inc. Oil & gas jumped 4.1 percent, boosted by BP, which rose 5.8 percent, as a strong operational performance driven by high oil and gas prices helped the British energy company increase share buybacks.
In Bond Markets U.S. benchmark 10-year Treasury yields backed off the 3 percent level on Tuesday, as the recent steep sell-off drew buyers and prompted investors to cover short positions ahead of an expected Federal Reserve decision to deliver an aggressive 50 basis-point interest-rate hike to contain rising inflation. The benchmark 10-year Australian yield rose 2 basis points to 3.40 percent in the wake of the RBA decision. U.S. two-year Treasury yields were up 4 bps at 2.770 percent. U.S. five-year yields were flat to slightly lower at 2.997 percent.