The U.S. Federal Reserve decided to continue tapering at their monetary policy meeting as labour conditions continued to improve. 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 initially sent stocks lower as they benefit from low interest rates which make borrowing money more attractive. The U.S. released the Philadelphia Fed Manufacturing Index yesterday which came out above expectations and investors began to brush off the rate hike as an improving economy would bolster corporate revenue. Consequently, stocks rebounded the Dow Jones closed 0.67% higher, the S&P 500 closed 0.60% higher, and the Nasdaq closed 0.27% higher. Asian stocks also rebounded and the Hang Seng closed 1.21% higher. The Nikkei, however, remained at 14,224.23 as the market remained closed for a public holiday. European markets opened higher as stocks recovered. Support was also found after ECB Executive Board member, Lautenschlaeger, said on Thursday that rates will remain low or go even lower for an extended period.
WTI Crude is poised for a third weekly drop as the EIA reported that crude supplies climbed to the highest level since November in the U.S as production increased. Yellens comments that the Fed could raise interest rates as soon as next year also pushed prices down as they added support to the U.S. dollar. Gold has been trending downwards throughout the week. The continuation of tapering and the possibility that the central bank’s stimulus program could end this fall have put pressure on the price. Fears over violence in Ukraine are also diminishing reducing the need for safe haven assets. Traders should look out for key speeches from FOMC Member later in the day.
Today’s Main Events:
12.30 GMT: CAD – Core CPI – measures the changes in the price of goods and services, excluding food and energy.
12.30 GMT: CAD – Core Retail Sales – measures the change in the total value of sales at the retail level in Canada, excluding automobiles
17.45 GMT: USD – FOMC Member Fisher Speaks – Due to deliver a speech titled “Forward Guidance: Fad or the Future of Monetary Policy” at the London School of Economics and Political Science’s Systemic Risk Conference
20.30 GMT: USD – FOMC Member Kocherlakota Speaks – Due to participate in a panel discussion titled “Transitional and Longer-Term Challenges for Monetary Policy” at the International Research Forum, in Washington DC
22.30 GMT: USD – FOMC Member Stein Speaks – Due to speak at the International Research Forum, in Washington DC
March 21, 2014- Daily Market News
Today’s Hot Assets : USD, CAD
The U.S. Federal Reserve decided to continue tapering at their monetary policy meeting as labour conditions continued to improve. 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 initially sent stocks lower as they benefit from low interest rates which make borrowing money more attractive. The U.S. released the Philadelphia Fed Manufacturing Index yesterday which came out above expectations and investors began to brush off the rate hike as an improving economy would bolster corporate revenue. Consequently, stocks rebounded the Dow Jones closed 0.67% higher, the S&P 500 closed 0.60% higher, and the Nasdaq closed 0.27% higher. Asian stocks also rebounded and the Hang Seng closed 1.21% higher. The Nikkei, however, remained at 14,224.23 as the market remained closed for a public holiday. European markets opened higher as stocks recovered. Support was also found after ECB Executive Board member, Lautenschlaeger, said on Thursday that rates will remain low or go even lower for an extended period.
WTI Crude is poised for a third weekly drop as the EIA reported that crude supplies climbed to the highest level since November in the U.S as production increased. Yellens comments that the Fed could raise interest rates as soon as next year also pushed prices down as they added support to the U.S. dollar. Gold has been trending downwards throughout the week. The continuation of tapering and the possibility that the central bank’s stimulus program could end this fall have put pressure on the price. Fears over violence in Ukraine are also diminishing reducing the need for safe haven assets. Traders should look out for key speeches from FOMC Member later in the day.
Today’s Main Events:
12.30 GMT: CAD – Core CPI – measures the changes in the price of goods and services, excluding food and energy.
12.30 GMT: CAD – Core Retail Sales – measures the change in the total value of sales at the retail level in Canada, excluding automobiles
17.45 GMT: USD – FOMC Member Fisher Speaks – Due to deliver a speech titled “Forward Guidance: Fad or the Future of Monetary Policy” at the London School of Economics and Political Science’s Systemic Risk Conference
20.30 GMT: USD – FOMC Member Kocherlakota Speaks – Due to participate in a panel discussion titled “Transitional and Longer-Term Challenges for Monetary Policy” at the International Research Forum, in Washington DC
22.30 GMT: USD – FOMC Member Stein Speaks – Due to speak at the International Research Forum, in Washington DC
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