Markets Await Fed Rate Decision

Markets are expecting a 25bps rate hike from the US Federal Reserve later, but it is seen as likely the last hike in the present cycle.



  1. Global stock markets were higher over the past day, as markets await today’s rate decision by the US Federal Reserve, with the S&P 500 Index and the the NASDAQ 100 Index having solid up days. In Asia, the Japanese Nikkei 225 Index and the Chinese Hang Seng Index are each up by more than 1.5%. Overall, markets are calmer, as there have been no further bank failures over the past day, although banking shares still look weak as a sector.
  2. US Treasury Yields continued to made substantial recoveries yesterday, with the 2-Year yield now trading well above 4%.
  3. Attention is focused on today’s meeting of the US Federal Reserve, with an emerging consensus expecting a 0.25% hike while seeing no hike at all as a real possibility. If the Fed passes on the hike, it is not fully clear that this will boost stocks.
  4. The price of Bitcoin still looks very bullish, as it continues to trade close to the 9-month high it made 2 days ago.
  5. Gold has made a bearish retracement after reaching a new multi-month high 2 days ago, and has not held up as well as Bitcoin.
  6. In the Forex market, the US Dollar added yesterday to its long-term decline within the prevalent bearish trend. Today, the Australian Dolar looks to be the strongest major currency, while the Euro is the weakest.
  7. Today will bring a release of UK CPI (inflation) data, which is expected to show a slight decline in its annualized rate from 10.1% to 9.9%.
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