Daily Market Bulletin – 17 March 2022

Market Developments

Investors appeared in a good mood, as they digested the Fed's announcements, while Covid-19 cases in China deescalate.

The US Fed raised rates by 25 basis points, to 0.25%-0.5% and "anticipates that ongoing increases in the target range will be appropriate" [1]. The updated dot-plot showed that officials expect roughly six more hikes this year [2], which would amount to quarter-point hikes in every meeting of 2022.

The bank also expects to begin the reduction of its balance sheet "at a coming meeting", with Mr Powell adding that this could come "as soon as our next meeting in May". [3]

Covid-19 cases in mainland China retreated further, as the National Health Commission announced today 1,226 new local case on March 16 (plus 91 imported), from 1,860 in the previous day. [4]

The Australian economy added 77.4K new jobs in February and the Unemployment Rate dropped to 4%, from 4.2% prior.

Ukrainian President Zelenskyy said that are the negotiations with Russia are "still in progress" and that they "are fairly difficult", in an NBC News interview. [5]

Main Asia-Pacific stock markets followed Wall Street higher, while their European peers are subdued. On the FX space, the JPY Basket the US Dollar are soft, while the Australian Dollar is helped by the solid AU jobs report.

Instruments Snapshot

EUR/USD tries to stay in profits afteryesterday's post-Fed rise, testing 1.1050.

GBP/USD enters its third profitable day and takes 1.3150 out.

USD/JPY shows indecision below yesterday's six-year highs (119.13)

USD/CAD extends its slide and tests 1.2650.

AUD/USD advances past 0.7300, helped by the AU jobs report.

NZD/USD is upbeat, trying to surpass 0.6850.

GER30 trades with caution above 14,400.

US30 faces pressure above 34,000.

USOIL gains more than 3%, returning above 98.50.

XAU/USD extends yesterday's rebound and reclaims 1,935.

Economic Calendar Picks (GMT)

Markets now turn to the monetary policy decision from the Bank of England (12:00), to see if it will deliver its third rate hike in a row.

From the rest of the docket, we expect Eurozone's CPI Inflation (10:00) and ms Lagarde's speech (09:30), as well as Jobless Claims (12:30) and Industrial Production (13:15) from the US.

Overnight, focus will shift Japan for the CPI Inflation figures (23:30) and the central bank's (BoJ) monetary policy decision (03:00).

See the economic calendar here.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 17 Mar 2022 https://www.federalreserve.gov/monetarypolicy/files/monetary20220316a1.pdf

2

Retrieved 17 Mar 2022 https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20220316.pdf

3

Retrieved 17 Mar 2022 https://www.youtube.com/watch

4

Retrieved 17 Mar 2022 https://www.youtube.com/watch

5

Retrieved 01 Jul 2022 http://en.nhc.gov.cn/2022-03/17/c_85889.htm

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