Daily Market Report

The U.S. Dollar fell sharply on Thursday as investors began to digest the latest FOMC rate decision. In the meantime, retail sales came out above expectations at 0.3% while the unemployment claims stayed at 262K.
In the stock market, U.S. major indices closed higher with the S&P500 reaching a fresh 13-month high. Moreover, the Dow jumped more than 400 points or 1.26% while the Nasdaq composite index added 1.15%.

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With the FED skipping another rate hike for the first time in 15 months, investors started to think that the U.S. central bank is about to end its rates hiking program soon.
Yesterday’s move pushed both the S&P500 and the Nasdaq to their highest intraday levels since April of last year.  

On the other hand, gold managed to bounce near the key technical support of $1930 as highlighted in our previous report, reversing the post-FOMC losses before settling near the $1960 mark. Likewise, Oil prices advanced after a negative start to the week. WTI prices settled back above the $70 psychological level on optimism about better global growth and Saudi production cut. Technically, a break above the $74.00-74.50 resistance zone is needed in the coming weeks to confirm a potential double-bottom formation that started from the 64.25 low.
Otherwise, we may continue to see sideways trading in the near term.

In Europe, the ECB decided to increase key interest rates by another 25 bps as widely anticipated. In addition, President Christine Lagarde said that another rate hike is very likely in July sending the Euro higher against the U.S. Dollar. The currency pair immediately reacted positively following the ECB decision, ending the day near the 1.0950 mark.

As of today, there will be only a few economic releases to focus on. In the Eurozone, traders await the release of the final CPI figures to see where current inflation levels stand. In the U.S., the University of Michigan consumer sentiment and inflation expectations are set to be released during the U.S. trading session.

Finally, FOMC’S voting member Waller is due to speak later during the day.


Economic Analyst
Amine Hiani

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