Daily Digest: Wednesday 1st May
USA
The FOMC’s April/May meet concluded on Wednesday with traders globally holding a close eye on the Fed’s forward guidance which seems to hold more weight this month than the prevailing interest rate decision. Following recent inflationary moves, the Fed chose to hold rates at 5.5% in line with analyst expectations. This signalled that despite hopes amongst policymakers for rate cuts this year, ongoing inflationary concerns and a lack of positive confirmations have continued to hamper efforts, as they move to adopt a higher for longer approach.
Equity market reactions were mixed as the S&P 500 and Nasdaq 100 closed 0.34% and 0.7% respectively, while the Dow rose 0.23%. The Nasdaq 100 ($NDX) led declines for a second consecutive session falling 122.14 points (0.7%) to 17,318.55, followed by the S&P 500 ($SPX), which fell 17.3 points (0.34%) to 5,018.39. Meanwhile, the Dow ($INDU) rose 87.37 points (0.23%) to 37,903.29.
Europe
The UK’s FTSE 100 (FTSE) continued to decline falling 22.89 points (0.28%) to 8,121.24. Once again losses were somewhat sharper across mainland European indexes, the STOXX 600 (€SXXP) fell 4.03 points (0.79%) to 504.31, while the French CAC (€FCHI) fell 80.22 points (0.99%) to 7,984.93 and the German DAX (€GDAXI) fell 186.15 points (1.03%) to 17,932.17.
Rest of the World
The Nikkei 225 (¥N225) traded 131.61 points (0.34%) down at 38,275.04, mirroring yesterday’s US equity directions. Traders are ultimately remaining cautious as they await the FOMC’s April/May rate decisions, with forward guidance remaining as important as the Fed funds rate. In terms of FX, the JPY has continued to depreciate, despite a possible intervention on Monday. As of 09:48 GMT, the USDJPY pair was trading at 157.94, over three Yen lower than Monday’s highs (154.5). This increases the likelihood of further intervention, as the effects of Monday’s strengthening fade, signposting an expensive road to stability for FX authorities.
The Indian Nifty 50 (₹NSEI) was a none mover on Wednesday as the nation celebrates the May Day bank holiday.
Commodities
WTI crude prices had fallen 3.38% to $79.16 per barrel as of 21:00 GMT. US weekly crude inventories saw increases of some 7.3 million barrels, against expectations of a 2.3 million barrel drawdown. This print suggests that supply-side pressures are not as tight as analysts had expected.
Gold prices seemed to benefit from the FOMC’s US interest rate decision with prices rising 1.0248% to $2,326.50
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice