The US stock market continued to rise on the 8th. Fed Chairman Jerome Powell and other US financial officials were no surprise, and the September FOMC meeting will see another significant rise in interest rates.
The dollar / yen exchange rate fluctuated around the ¥ 144 mark.
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The S&P 500 stock index rose 0.7% to 4006.18 from the previous day. During the day, volatility was high and the price had a series of back and forth movements, but in the 15 minutes before the close of trading, the gains increased and closed above 4,000. The Dow Jones Industrial Average rose $ 193.24, or 0.6%, to $ 31,774.52. The Nasdaq Composite Index rose 0.6%.
Fed Chairman Jerome Powell has promised the Fed will not back down “until the task of curbing inflation is completed.” “It is very important to keep inflation expectations in check,” he said Wednesday at the Cato Institute’s monetary policy meeting in Washington. “We want policy interventions to give the economy a period of below-potential growth so that the labor market is better balanced and wages are more aligned with the 2% inflation target. It is falling,” he said. .
Fed Is Likely To Raise Rates Significantly – President Powell Maintains Hawk Stance (2)
“The Fed’s comments again brought volatility into the range,” said Julian Emmanuel, chief equities and quants strategist at Evercore ISI. “When it comes to unbearably high inflation expectations becoming part of the norm for US consumer behavior, Mr. Powell sees” time is running out, “he said.
Chicago Fed Chairman Evans said he might decide to hike rates by 0.75 percentage points in September, but said he wasn’t sure.
The Chicago Fed chairman sees a 0.75 point rate hike on the September FOMC
Bank of America economist Michael Gepen said decisions may still be fluid at the September meeting and a surprise bearish surprise in next week’s consumer price index (CPI) could make that even more likely, stating that a small rate hike is possible. But he said he was more likely to decide to raise rates by 0.75 percentage points.
US equities could drop 25% in recession, says Deutsche Bank Chada
The US Treasury has fallen. After being sold early in the morning in response to President Powell’s remarks, as shares continued to rise, they generally fell. At 4:23 pm New York time, the 10-year yield increased 5 basis points to 3.32%. Yields on two-year monetary policy sensitive bonds increased by 7 basis points to 3.50%.
“The Fed retains the possibility of a 0.75 percentage point rate hike in September,” said Ian Lyngen, head of US rate strategy at BMO Capital Markets. “This week’s remarks raised the hurdle for CPI in August to solidify the likelihood of a half-point rate hike,” he said. We need an external decline, “he said. A Bloomberg survey predicts core CPI will rise 0.3%.
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– President Powell speaks (8th) Source: Bloomberg
In the foreign exchange market, the dollar is generally strong against the top 10 currencies. Rising US Treasury yields provide the backdrop. The euro fell after the European Central Bank (ECB) decided to raise interest rates by 0.75 points, as expected by the market, but reduced the loss as US equities rose.
ECB records historic rate hike of 0.75 points – further rate hikes on the way (2)
The dollar rose slightly against the yen. The market continued to fluctuate throughout the day, but was supported by rising global bond yields and high US stock prices. As of 4:24 pm New York time, the stock is up 0.2% to ¥ 144.05.
“As long as stocks don’t drop too much and US bond yields continue to rise, yen weakness is likely to persist,” said Kit Jacks, Société Générale’s chief currency strategist. “But the cheaper the yen, the greater the risk of a sharp rise in the yen when the yield cycle reverses.”
“For now, Japanese officials seem reluctant to act unilaterally rather than verbally raise the currency,” said Valentin Marinov, G10 head of currency research at Credit Agricole. “Given that the United States has refused even to discuss the possibility of intervening to weaken the dollar, coordinated intervention is still a long way off,” he said.
The Bloomberg Dollar Spot Index, which shows the movement of the dollar against the 10 major currencies, was virtually unchanged from the previous day. The euro fell 0.1% against the dollar to $ 0.9998 per euro.
New York crude oil futures rebounded from the eight-month low. US government data showed rising oil inventories and slowing demand, but the market didn’t take it seriously.
Traders see this as a technical correction after the market plunges into oversold territory. Prices rose on the day, although the four-week average of fuel demand declined as government data showed crude oil inventories rose 8.85 million barrels last week.
“Crude oil prices are about to reverse their lowest level since March,” said Dennis Kistler, senior vice president of BOK Financial Securities. The background is the opinion that it is
West Texas Intermediate (WTI) futures for October delivery on the New York Mercantile Exchange (NYMEX) rose $ 1.60, or 2 percent, to $ 83.54 a barrel. The London ICE North Sea Brent contract for the November contract rose $ 1.15 per barrel to $ 89.15 per barrel.
The New York gold futures market fell. Gold futures for December delivery on the New York Mercantile Exchange (COMEX) closed at $ 1,720.20 an ounce, down 0.4% from the previous day.
Original title:Actions on unstable ground with the Fed’s Hawkish script: Markets Wrap(extract)
Treasury holds back losses, curve flattens after Powell talks about politics （抜 粋）
Short-term Treasury rates rise as Powell talks hard on inflation （抜 粋）
Dollar mostly bullish, euro cuts loss after ECB: inside G-10 （抜 粋）
The yen also falls as Japan says all options on the table move to FX(extract)
Oil rebounds from the 8-month low after hitting oversold territory(extract)
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