The minutes of the most recent FOMC meeting show members open to more 0.25% rate hikes if inflation data warrants.
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- FOMC meeting minutes released yesterday show members trying to strike a balance between tipping the economy into recession and keeping rates high enough to bring down a more persistent than expected level of inflation towards the Fed’s 2% target. The dot plot currently suggests a terminal rate of 5.6% will be reached in 2023. Members noted that inflation has eased over the past 3 months, but that further progress is required. This does not represent any real surprise to analysts.
- Global stock markets had a down day, which saw the S&P 500 Index close below the psychologically important 4000 level. The NASDAQ 100 Index closed higher though, and there are signs this morning of a small recovery in equities. The S&P 500 Index made a golden cross two weeks ago. This is typically a strong long-term buy signal, although the price has fallen since then.
- The 2-year US treasury yield remains near its long-term high.
- In the Forex market, the New Zealand Dollar is the strongest major currency today, while the US Dollar is currently the weakest. However, it is worth noting this is over the short-term and the US Dollar has been broadly strong during recent weeks.
- Some commodities are performing quite well, with some continuing to rise after having recently made significant bullish breakouts, notably Sugar and Cocoa. However, the price of WTI Crude Oil is showing some strongly bearish momentum as it trades lower.
- There will be a release of Preliminary US GDP data later today.
- Daily confirmed new global coronavirus cases decreased last week for the eighth consecutive week.
- Total confirmed new coronavirus cases worldwide stand at over 678.9 million with an average case fatality rate of 1.00%. Daily new confirmed cases have fallen to a low level not seen since May 2020, just after the start of the pandemic.
