The U.S. Federal Reserve concluded their two day monetary policy meeting yesterday which was followed by Janet Yellen’s first press conference as Chairwoman. The Fed concluded that recent information shows economic growth slowed throughout the winter months but it was, in part, down to the bad weather experienced across the region. Furthermore, labour conditions continue to improve but the unemployment rate still remains elevated. Consequently, tapering continued and they reduced the current quantitative easing program by a further $10 billion. Although no specific timeline was stated, Yellen also suggested that the Fed may start to hike interest rates as early as April 2015 which came as a great surprise to the market. The news sent U.S. stocks lower as stocks have benefited from low interest rates which make borrowing money more attractive. At the close of U.S. trading, the Dow Jones was 0.62% lower, the S&P 500 was 0.61% lower, and the Nasdaq was 0.59% lower. Markets in Asia also moved lower. The Nikkei opened with gains as the Dollar climbed 0.9% against the Yen but it later tracked other losses closing 1.65% lower. The Hang Seng lost 1.8% lower shrugging off positive earnings from its largest constituent, Tencent. European stocks have started the day with sharp losses. Currently, the FTSE 100 is down 0.77% while Germany’s DAX is off 0.53% and France’s CAC 40 is lower by 0.52%.
West Texas Intermediate crude climbed above $100/barrel after the EIA showed inventories at Cushing dropped for a seventh week. Prospects for greater economic growth in the U.S. also boosted prices as this would lead to greater demand. The current accommodative policy in the U.S. also provides support for oil as low interest rates make spot commodities more attractive. Gold declined yesterday following the Feds decision to continue tapering. The Feds statement was more hawkish than expected and so caused the dollar to rally which puts pressure on the yellow metal. Rising interest rates historically have been a negative for gold, which can not compete with the higher interest rates offered by other assets. Traders should focus on data from the U.S. later today including Existing Home Sales and Philadelphia Fed Manufacturing Index at 2pm (GMT).
Today’s Main Events:
11.00 GMT: GBP – CBI Industrial Trends Orders – measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions.
12.30 GMT: USD – Initial Jobless Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week
14.00 GMT: USD – Existing Home Sales – measures the change in the annualized number of existing residential buildings that were sold during the previous month.
14.00 GMT: USD – Philadelphia Fed Manufacturing Index – rates the relative level of general business conditions in Philadelphia
March 20, 2014 – Daily Market News
Today’s Hot Assets: USD, Gold
The U.S. Federal Reserve concluded their two day monetary policy meeting yesterday which was followed by Janet Yellen’s first press conference as Chairwoman. The Fed concluded that recent information shows economic growth slowed throughout the winter months but it was, in part, down to the bad weather experienced across the region. Furthermore, labour conditions continue to improve but the unemployment rate still remains elevated. Consequently, tapering continued and they reduced the current quantitative easing program by a further $10 billion. Although no specific timeline was stated, Yellen also suggested that the Fed may start to hike interest rates as early as April 2015 which came as a great surprise to the market. The news sent U.S. stocks lower as stocks have benefited from low interest rates which make borrowing money more attractive. At the close of U.S. trading, the Dow Jones was 0.62% lower, the S&P 500 was 0.61% lower, and the Nasdaq was 0.59% lower. Markets in Asia also moved lower. The Nikkei opened with gains as the Dollar climbed 0.9% against the Yen but it later tracked other losses closing 1.65% lower. The Hang Seng lost 1.8% lower shrugging off positive earnings from its largest constituent, Tencent. European stocks have started the day with sharp losses. Currently, the FTSE 100 is down 0.77% while Germany’s DAX is off 0.53% and France’s CAC 40 is lower by 0.52%.
West Texas Intermediate crude climbed above $100/barrel after the EIA showed inventories at Cushing dropped for a seventh week. Prospects for greater economic growth in the U.S. also boosted prices as this would lead to greater demand. The current accommodative policy in the U.S. also provides support for oil as low interest rates make spot commodities more attractive. Gold declined yesterday following the Feds decision to continue tapering. The Feds statement was more hawkish than expected and so caused the dollar to rally which puts pressure on the yellow metal. Rising interest rates historically have been a negative for gold, which can not compete with the higher interest rates offered by other assets. Traders should focus on data from the U.S. later today including Existing Home Sales and Philadelphia Fed Manufacturing Index at 2pm (GMT).
Today’s Main Events:
11.00 GMT: GBP – CBI Industrial Trends Orders – measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions.
12.30 GMT: USD – Initial Jobless Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week
14.00 GMT: USD – Existing Home Sales – measures the change in the annualized number of existing residential buildings that were sold during the previous month.
14.00 GMT: USD – Philadelphia Fed Manufacturing Index – rates the relative level of general business conditions in Philadelphia
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