Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

<b> MARKET</b> ANALYSIS <b> MARKET</b> ANALYSIS

MARKET ANALYSIS

Cutting-Edge Market Commentary for Informed Strategy Making

DAILY MARKET ANALYSIS 16-06-2022


Central banks are in the eye of the storm amid global stubbornly high inflation. The US Federal Reserve was the star of the day. The central bank hiked rates by 75 bps, the most significant hike since 1994, but dismissed the chances of a 100 bps hike. Chief Powell said the current pace of hikes is appropriate and that it could be either 50 or 75 bps in the next meeting, adding they are “front-loading.” Overall, chief Powell managed to cool down market fears. Earlier in the day, the European Central Bank called for an emergency reunion. The ECB decided that it would apply flexibility in reinvesting redemptions coming due in the pandemic emergency purchase programme (PEPP) portfolio, concerned about the bonds’ sell-off over the last few days. Meanwhile, the EU has announced new legal action against the UK government over its plans to scrap parts of the Northern Ireland Protocol. The UK aimed to change trade, tax and governance arrangements that disrupted trade in the kingdom. UK Prime Minister Boris Johnson’s spokesman said afterwards that the UK is disappointed with the EU bringing legal action over the Brexit deal.

Stocks

US stock futures tracking the broader were down roughly 2%, putting major indexes on track to open sharply lower as investors fretted over the implications of an aggressive tighter monetary policy on the growth momentum. The Federal Reserve raised its target interest rate by three-quarters of a percentage point on Wednesday to address the highest inflation seen since late 1981.

European stocks slipped on Thursday after the U.S. Federal Reserve's decision to raise interest rates aggressively fuelled concerns about a potential recession at a time when global economies are facing sky-high inflation. The continent-wide STOXX 600 index dipped 0.4% while UK's blue-chip FTSE 100 fell 0.5% ahead of a Bank of England policy meeting expected to result in another interest rate hike.

Asia-Pacific markets were mixed in Thursday trading with multiple regional markets shedding earlier gains as buoyant sentiment from overnight moves on Wall Street following a Federal Reserve rate hike that equated to its most aggressive such move since 1994 faded. The Hang Seng index in Hong Kong led losses among the region’s major markets, falling more than 2.5%. In mainland China markets, the Shanghai Composite finished the trading day 0.61% lower at 3,285.38 while the Shenzhen Component edged 0.109% to 12,150.96. Japan’s Nikkei 225 rose 0.4% on the day to 26,431.20 while in Australia, the S&P/ASX 200 closed 0.15% lower at 6,591.10.

Currencies

 The dollar index steadied near the 104.5 mark on Thursday after retreating from 20-year highs in the previous session, as the Federal Reserve implemented a large but widely expected interest rate hike. The sharp increase in rates came after the CPI report released last week showed US inflation surged unexpectedly to a more than four-decade high of 8.6% in May.

• EUR/USD has gathered bullish momentum in the American session on Thursday and climbed above 1.0450. Following the mixed macroeconomic data releases from the US, the US Dollar Index fell into negative territory near 104.50, reflecting renewed dollar weakness

  GBP/USD has continued to push higher and climbed to a fresh three-day high above 1.2200 in the second half of the day on Thursday. The Bank of England's (BOE) hawkish tone and the renewed dollar weakness after mixed data fuel the pair's upside.

 The AUD/USD pair witnessed an intraday pullback from the vicinity of the weekly high and now seems to have stalled its solid recovery move from a one-month low touched earlier today. Aussie was last seen hovering just below the 0.7000 mark.

 USD/JPY came under some fresh selling pressure on Thursday and dived to over a one-week low. This marked the second successive day of decline and dragged spot prices to a one-and-half-week low, around the 132.30 region during the early part of the European session.

Bonds

The yield on the 10-year US Treasury note fell below the 3.4% level after the Federal Reserve hiked its funds rate by 75bps in its June meeting, in line with more recent market estimates after the latest consumer price data came well above expectations at a 41-year high. Germany 10Y Bond Yield was 1.72 percent on Thursday June 16, according to over-the-counter interbank yield quotes for this government bond maturity.

Commodities

Gold prices inched lower on Thursday, as the dollar recovered slightly after a large but widely expected interest rate hike by the U.S. central bank sent the currency tumbling in the previous session. The precious metal was last seen moving sideways in the $1.828 region.

Oil prices recovered on Thursday from a steep drop in the previous session, supported by tight oil supply and peak summer consumption, after a U.S. rate hike sparked fears of slower economic growth and less fuel demand. Brent crude rose to $119.28 a barrel while U.S. West Texas Intermediate (WTI) crude was seen traded around $116 per barrel.

Up Ahead Friday 17-06-2022

   JPY BOJ Press Conference

   USD Fed Chair Powell Speaks


               

*The information presented above is intended for informative and educational purposes, should not be considered as investment advice, or an offer or solicitation for a transaction in any financial instrument and thus should not be treated as such. Past performance is not a reliable indicator of future results.

 

DEPOSIT METHODS

Deposit Methods 1
Deposit Methods 2
Deposit Methods 3
Deposit Methods 4
Deposit Methods 5

Copyright © 2023 - All rights reserved.

SohoMarkets (Cyprus) is a Trade name of Vstar & Soho Markets Ltd which is registered as a Cyprus Investment Firm (CIF) and licensed by the Cyprus Securities and Exchange Commission (CySEC) under licence number 409/22.

RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Vstar & Soho Markets Ltd. provides services to residents of the European Economic Area (excluding Belgium), Switzerland, India, Indonesia, Malaysia, Philippines and Vietnam.

CLIENT AGREEMENT (TERMS AND CONDITIONS) CLIENT CATEGORISATION POLICY Complaints or Grievances Policy Conflicts of Interest Policy Cookie Policy Investor Compensation Fund Key Information Document COMMODITIES CFD Key Information Document CRYPTOCURRENCIES CFD Key Information Document FX CURRENCIES CFD Key Information Document INDICES CFD Key Information Document ENERGY CFD Key Information Document METALS CFD Key Information Document STOCKS CFD Order Execution Policy Privacy Policy Risk Disclosure