The Fed sees the need to raise rates more than the market has priced in
Wall Street stocks advanced on Wednesday after the minutes from the Fed’s May meeting showed officials saw the need to raise rates more than the market has priced in. Most participants said that 50 basis point increases in the target range “would likely be appropriate at the next couple of meetings”. The S&P 500 rose 0.9%, the Dow Jones Industrial Average gained 0.6%, and the Nasdaq rose 1.5%.
Asian equity markets witnesses another mixed session on Thursday as the FOMC minutes contained no hawkish or dovish surprises to rattle investors. The Shanghai Composite Index rose 0.5% and the Nikkei 225 in Tokyo shed 0.27%. The Hang Seng in Hong Kong gave up 0.38% while Sydney’s S&P-ASX 200 sank 0.69%. Kospi finished 0.18% lower after the South Korea’s central bank hiked its base rate by 25bp, as expected.
In Europe, stocks were little changed at the open before turning positive during the session along with US stock index futures as investor sentiment picked up a little. The pan-European Stoxx 600 edged 0.2% higher in early trade, with energy stocks leading the gains. Meanwhile, banks and technology stocks fell marginally.
In currencies, the dollar came off intraday highs to turn slightly negative on the day as risk sentiment has improved somehow. The USD index is treading water around the 102.00 figure after yesterday’s rejection from the 102.45 zone. EURUSD is just above the flat-line, holding below the 1.0700 mark that represents the immediate target for euro bulls at this stage.
Elsewhere, gold prices retain a bearish bias since yesterday after failure to overcome the $1,870 resistance zone. The precious metal keep threatening the 200-DMA while also flirting with the 20-DMA at the moment, struggling for direction in early European trading hours. Should the bullion fail to hold above the 200-SMA, the selling pressure may intensify in the near term.