US Stocks held lower but pause the decline, US Dollar spiked to 104,50 and Yields richened on short covering following the recent rout, but ended off of the day’s lows as FOMC minutes fail to provide fresh clues to alter expectations on the path. The 10-year was down 3.7 bps to 3.916%.
FOMC minutes solidified views for further hikes and a higher funds rate through the year. Fed funds futures are suggesting some increased risk for a 50 bp increase at the March 21-22 meeting with the implied rate at 4.878%. May is showing a 5.132% rate, with June at 5.30%. The peak is still seen in July at 5.358%. One notable factor in the market, however, is a 5.02% rate is now priced in for January 2024.
USD Index slightly below 104.51, hovering around 23%. The market has fully priced in further rates hikes with a 25 bp increase on March 22, and another 25 bp on May 3. JPY – hoovering around 134.70-134.90. Stocks – wavered narrowly through the session before closing either side of unchanged with the US100 (0.13%), US500 (-0.16%), US30 (-0.26%). Mix earnings news: Pioneer Natural Resources Co. (#PXD.s) reported $7.8bn record profits in 2022 — more than triple its previous record of $2.1bn the previous year. Pioneer is becoming the latest oil producer to reap the rewards of high oil prices in the wake of Russia’s invasion of Ukraine. ExxonMobil (#XOM.s) brought in a record $56bn. Rolls-Royce beats forecasts with 57% profit rise. BIDU -2.63% hopes its own artificial intelligence-powered chatbot will put the company back on the path to growth. Baidu stock is up 26% so far in 2023. Nvidia surged almost 9% after the bell Bank of Korea holds interest rates steady for first time in a year Commodities – USOil dropped to $73.80 as EIA Europe’s energy war with Russia is not over, warns IEA. Also on geopolitics as Biden meets eastern european leaders, stresses unity, Chinese diplomat lauds Russia ties in Putin meeting. Brent crude posted its biggest single-day loss in 7-weeks. Market reassess positions after the US Federal Reserve stoked worries about the economy by suggesting further rate hikes ahead. Gold – steady above $1817 for more than a week. Cryptocurrencies – BTC – rebounded to $24,350.Today – Europe and Japan are to release annual inflation data, US Prelim GDP and unemployment claims, while Alibaba will also release its earnings.
Biggest FX Mover @ (07:30 GMT) Palladium drifts to1450. MAs extend lower, MACD histogram & signal line negative, RSI 30.
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Andria Pichidi
Market Analyst
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