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US stocks lower as Fed might raise more interest rate


US stocks recorded their worst day in two months on Tuesday, as investors were unnerved by economic data suggesting interest rates have further to rise after months of increases by the Federal Reserve.  The blue-chip S&P 500 index ended down 2 percent, with declines in every sector. The tech-heavy Nasdaq Composite slid 2.5 percent. Both indices had their steepest daily losses since December 15.

Markets have wobbled in recent days as investors gird for further interest rate rises from the Fed to combat inflation in the US economy. Yields on benchmark Treasury bonds reached three-month highs on Tuesday, pushing yields up to 3.95 percent.

Ahead of Wednesday’s trade, market participants will be closely monitoring the latest FOMC meeting minutes as well as a speech from FOMC member Williams. Key reports to watch include the PCE Prices Index this Friday (2/24), the Job Openings and Labor Turnover report on 3/8, the February Employment Report on 3/10, and the Consumer Price Index on 3/14.

Main Pairs Movement

DXY trades within a tight range near Friday’s closing levels in the sub-104.00 zone.

Higher Treasury yields and a projected 5.3% terminal Fed funds rate have seen a resurgence in the US Dollar index, DXY. At the time of writing, the price traded at 104.171.

GBP/USD grinds higher past 1.2100, mildly bid around 1.2115 during the initial hours of Wednesday’s Asian trading, as upbeat UK fundamentals keep Cable buyers hopeful ahead of the key Federal Open Market Committee’s Monetary Policy Meeting Minutes. At the time of writing, the price traded at 1.2118.

Gold price holds lower grounds near $1,835, following a two-day downtrend, at the time of writing, price trading at 1836.18.

Brent crude settled 1.2 percent lower to $83.05 a barrel, while the US equivalent WTI price is declining towards $75.50 as the expectations for more rate hikes by the Fed are escalating.

Economic Data:

CurrencyDataTime (GMT + 8)Forecast
NZDRBNZ Interest Rate Decision09:004.75%
NZDRBNZ Rate Statement09:00 
NZDRBNZ Press Conference10:00 
EURGerman CPI (YoY) (Feb)15:008.70%
EURGerman Ifo Business Climate Index (Feb)17:0091.4
NZDRBNZ Press Conference22:00