© Reuters Anticipation of the Fed’s decisions casts a shadow over risk appetite today
Arabictrader.com – Wednesday’s trading witnessed a clear decline in risk appetite among investors, with the market’s focus fully directed towards the interest rate decision of the US Federal Reserve today, and then the press conference of Bank Governor Jerome Powell, in which he will clarify some signals about the directions of monetary policy in the coming period, and regarding The following are the developments in risk appetite on the most prominent assets traded in the markets:
First: Risk Appetite and Stock Markets:
Risk appetite witnessed a clear decline in most global stock markets, amid investors’ caution, coinciding with their anticipation of the release of US data and the US Federal Reserve’s decision, which will have a significant impact on stock market trading.
European stocks witnessed a divergence in their performance, as the German and French stock indices declined marginally, while the British stock indices witnessed stability, with trading near the closing level yesterday.
At the same time, US stock index futures fell during pre-market trading, while Japanese and Chinese stock indexes closed higher.
Second: Risk Appetite and the US Dollar:
The US dollar continued to decline since the beginning of the early trading of today’s session, as it was subjected to selling operations while awaiting the US Federal Reserve’s decision and Powell’s statements afterwards, which would greatly affect the dollar’s trading.
Expectations now indicate that the Fed may raise interest rates by 25 basis points, but the markets are also very focused on Powell’s comments, as he may announce the end of the monetary tightening cycle.
At the same time, yields fell dramatically, which put more downward pressure on the US dollar.
Third: Appetite for risk and gold:
Gold witnessed a marginal decline during early trading, but it managed to erase those losses as a result of the significant decline in the US dollar and US Treasury bond yields, and recovered to settle near yesterday’s closing level with the approaching issuance of the Federal Reserve’s decision, as risk appetite declined significantly and investors turned towards gold as a safe haven.
Fourth: Appetite for risk and oil:
Oil contracts rose marginally, with anticipation of the OPEC + decision today regarding the volume of production for the month of March next, but the data on the decline in oil production in Iraq – one of the members of the organization – as well as the continued decline in Nigerian production, in addition to the news that OPEC + oil production came lower. Of the target of 920,000 barrels per day, it provided some support for prices.
The impact of risk appetite on currencies and commodities:
Risk Appetite and the US Dollar: – which measures the performance of the US currency against 6 of the major currencies – declined by 0.24%, to record 101.86 points.
Risk Appetite and Gold: Prices rose marginally by 0.09% to $1,930.11 an ounce, and bullion futures prices also rose by 0.06% to $1,946.40 an ounce.
Risk appetite and oil: Crude futures prices rose by 0.42% to record $85.81 a barrel, and West Texas Intermediate crude prices increased by 0.60% to $79.33 a barrel.
