US indices have a bumper session on the back of positive direction given from the Federal Reserve

US indices had a bumper day of trading as the Federal Reserve increased interest rates by 25 basis points. The Reserve is also expected to raise rates to between 1.75% and 2.00% by the end of the year, with 7 increases expected till the end of 2022. The Federal Reserve made it clear that they are doing their utmost to fight inflation. Jerome Powell also indicated that the economy shouldn’t need to enter into a recession. Whilst the Federal Reserve lowered economic projections for 2022 and increased inflation most of this had already been priced in.

The Nasdaq finished the very strong session up 3.77% as tech stocks rebounded after initially selling down on the Federal Reserve’s announcement. It was supported by the Dow Jones and the S&P500 which were up 1.55% and 2.24% respectively.

In Europe, the FTSE had a solid day rising 1.62% and the DAX performed very well increasing by 3.76%.

The Chinese stock market both in Hong Kong and on the mainland was also roaring yesterday on the back of a commitment from China’s State Council to sure up and introduce policies to boost its economy. The CSI 300 index gained 4.3% and the Hang Seng index jumped 9.1%, its largest jump since 2008. This may provide some confidence for the region.

Commodities

Commodity prices continue their retreat from their highs a few weeks ago. Brent Crude Oil continues to hover below 100 USD finishing the day at 97.96 USD a drop of 0.74%. Gold was able to hold its support level at 1917 USD per ounce and bounced after initially dropping below 1,900 USD due to the interest rate announcement. Natural gas continues to tighten its price range and increased by 2.80%

Cryptocurrency

Bitcoin had a high volume buying day as buyers stepped up and the price of BTC/USD increased by 4.83% to 41,202 USD. Bitcoin remains rangebound however the volume increase indicates attention may be returning. Similar results occurred for Ethereum with the ETH/USD increasing by 5.60% to 2,766 USD.

FOREX

The USD was weak against most other currencies following the Federal Reserve’s announcement. The AUD had a strong day backed by its commodities moving up 1.29% against the USD. The EUR/USD and GBP/USD both reacted positively to Federal Reserve’s announcement, with them moving up 0.71% and 0.81% respectively. Against the CHF the USD was able to hold up relatively well at the 0.9400 level.

The market will likely continue to react to the news from the Federal Reserve as the week draws to an end.