Spreads
Spreads
Spreads
Spreads
Spreads
US stocks tumbled on Wednesday, suffering from heavy losses and extended their intra-day slide as traders were overwhelmed by the many headlines that followed the Federal Reserve decision. The American central bank hiked the benchmark rate by 75 bps to 3.25% as widely anticipated, meanwhile spurring volatility across the FX board and exerting bearish pressure on equity markets. The Fed Chief Jerome Powell was cautiously optimistic about economic progress and has signalled even more aggressive hikes than investors had envisioned, as he said that Fed officials were strongly resolved to bring inflation down to the Fed’s 2% goal and will keep at it until the job is done. Officials forecast that rates would reach 4.4% by the end of this year and 4.6% in 2023.
In the Eurozone, market sentiment was hit by rising geopolitical tensions as Russian President Vladimir Putin announced a mobilization of reserve forces to support the Ukraine war. EU member states have also held a meeting to discuss a coordinated response to the continuation of the war.
The benchmarks, S&P 500 and Dow Jones Industrial Average both retreated sharply on Wednesday as the S&P 500 extended its plunge from a January record to more than 20%. The S&P 500 was down 1.7% on a daily basis and the Dow Jones Industrial Average also dropped lower with a 1.7% loss for the day. All eleven sectors in S&P 500 stayed in negative territory as the Consumer Discretionary and the Communication Services sectors are the worst performing among all groups, losing 2.37% and 2.29%, respectively. The Nasdaq 100 meanwhile declined the most with a 1.8% loss on Wednesday and the MSCI World index was down 1.5% for the day.
Main Pairs Movement
The US dollar surged higher on Wednesday, preserving its upside momentum and extended the rally towards the 111.0 mark in the late US trading session following the interest rate decision by the Federal Reserve. Fed’s Powell has announced a third consecutive rate hike by 75 bps to tame inflation sooner, which provided strong support to the safe-haven greenback.
GBP/USD suffered daily losses on Wednesday with a 0.97% loss as the cable licked Fed-linked wounds at a 37-year low under the 1.1300 mark after a volatile day. On the UK front, UK Business Department announced that it would cap the cost of electricity and gas for businesses. Meanwhile, EUR/USD coming under bearish momentum and approaches multi-year lows near the 0.982 mark amid the stronger US dollar across the board. The pair was down almost 1.30% for the day.
Gold advanced higher with a 0.53% gain for the day after refreshing its daily top above the $1,687 mark during the US trading session, as the safe-haven metal staged a moderate rebound after a volatile session amid Fed’s monetary policy meeting. Meanwhile, WTI Oil dropped further with a 1.24% loss for the day after retreating from a daily high near the $86.6 area amid fears of energy demand. However, Russia’s mobilization of troops also renewed supply fears.
Economic Data
| Currency | Data | Time (GMT + 8) | Forecast |
| USD | FOMC Economic Projections | 02:000 | – |
| USD | FOMC Statement | 02:00 | – |
| USD | Fed Interest Rate Decision | 02:00 | 3.25% |
| USD | FOMC Press Conference | 02:30 | – |
| JPY | BoJ Press Conference | 14:30 | – |
| CHF | SNB Interest Rate Decision | 15:30 | 0.5% |
| CHF | SNB Press Conference | 16:00 | – |
| GBP | BoE Interest Rate Decision | 19:00 | 2.25% |
| USD | Initial Jobless Claims | 20:30 | 218K |
