German Industrial Production, US Unemployment Claims and Consumer Credit

The U.S. dollar index (USDX) was trading slightly higher on Wednesday, hitting its highest level in two years following the final minutes of the Fed meeting which bolstered expectations for upcoming rate hikes by fifty basis points to deal with the recent surge in inflation.

Against emerging market currencies, the greenback painted a mixed picture losing ground against CNH and TRY while gaining against INR and remaining virtually unchanged against ZAR.

Crypto markets closed another day in negative territory, with Bitcoin losing more than 4% of its value by the end of the day, trading below the $44,000 mark while Ethereum lost nearly 7% of its value. its value trading near $3,200 at the end of the session. . Other major cryptos that fell significantly were Solana and Cardano losing nearly nine percent and eight percent respectively on Wednesday. With these developments, the total crypto market cap is now estimated to be around $2.11 trillion.

Stock indices in most regions were mostly down, with markets like the US Tech 100, Germany 40, China A50 and Australia 200 all ending the day slightly lower.

For Thursday, monthly German industrial production and retail sales data are due from the euro zone while later in the US session, US jobless claims, US consumer credit and speeches from several members of the Federal Reserve are expected, including Treasury Secretary Janet Yellen.

EUR/USD

The EUR/USD rate fell Wednesday for the fifth day in a row on the back of a stronger dollar, with comments from Fed officials indicating that significant rate hikes are ahead, if inflationary pressure does not recede.

Fed members also agreed to reduce the balance sheet by $95 million a month over a three-month period, of which $60 billion will come from Treasury holdings and $35 billion from mortgage-backed securities, according to March meeting minutes.

Some of the key economic releases due Thursday include monthly data on German industrial production and eurozone retail sales as well as unemployment claims and consumer credit from the United States.

Gold

Gold ended Thursday slightly higher and has been trading in a tight range over the past week, fluctuating between rates of $1915.88 and 1950.24 per troy ounce.

The prospect of multiple half-percent rate hikes to come seems to add pressure on the price of the precious metal, however, the uncertainty brought by the conflict in Ukraine seems to limit the negative impact.

In recent news, the United States has imposed more sanctions on Russia after killings of civilians widely condemned as war crimes and Ukraine’s president has called for a decisive Western response amid divisions in Europe.

Gold

WTI oil

Oil prices fell for the second day in a row on Wednesday, ending the day down 4.17% on the Vestle platform, with the price of WTI remaining below the key $100 level and ending the day at $97 a barrel. .

Part of the drop could be attributed to an announcement by the IEA that it will release 120 million barrels of its members’ reserves into the open market to cover a global supply shortage. According to the IEA on Wednesday, half of its 120 million barrel release will come from the United States.

Adding to negative market sentiment, the EIA reported that crude oil inventories added 2.421 million barrels last week, compared to expectations of an average decline of 2.056 million barrels.

WTI oil

500 United States

Major U.S. equity indices continue to decline for a second day, moving further away from levels seen earlier in the week, driven primarily by a decline in the technology and consumer discretionary sectors. The decline was further supported by hawkish Fed minutes indicating plans to make significant rate hikes in subsequent meetings while shrinking the central bank’s $9 trillion balance sheet.

The Fed’s tough stance on monetary policy signals that the central bank is determined to tackle the recent surge in inflation, as supply chains have once again been hit.

The scenario of at least seven more rate hikes by the end of the year seems to be getting closer given the recent wave of Covid in China while at the same time the price of grains and energy s It is also soaring due to the impact of Russia’s war on Ukraine, adding to the outlook for higher long-term inflation.

500 United States

James R. Rhodes