“US Market Trends: High-tech Stocks Boosting Stocks, Pushing US Dollar above 132 Yen Range”

The US stock market continued to rise on the 30th. Fed officials reiterated their commitment to curb inflation, but were bought mostly by technology stocks.

Financial stocks in the S&P 500 index were weak. The tech-heavy Nasdaq 100 index rose 0.9%. The index entered a bull market the day before.

Despite a spate of bank failures this month, the Fed has digested comments from Fed officials suggesting further tightening is needed. Richmond Fed President Barkin said inflation risks remain. If the economy slows down more than expected due to the impact of the credit crunch, policymakers will need to respond quickly, he said. Boston Fed President Collins also said more interest rate hikes are needed to keep inflation down. Minneapolis Fed President Neel Kashkari said the Fed is committed to returning inflation to its 2% target and said the impact of the financial turmoil on the economy was not yet known.

Fed’s Boston needs more rate hikes to curb inflation, says banking system is healthy

“The fissures in the banking system have become more apparent, making the Fed’s job even harder,” said Jim Baird, chief investment officer at Plantmoran Financial Advisors. “Recession risks remain the focus,” he said, after the Fed has struggled in the past to tighten policy while guiding the economy to a soft landing.

The Biden administration has called on relevant authorities to tighten regulations on midsize banks. New measures will be taken to deal with the banking crisis that led to the bankruptcies of two U.S. banks. Stress in the financial sector has increased the likelihood that a US interest rate hike will tip the economy into recession.

Biden Administration Proposes Tougher Banking Regulations, Asks Regulators to Make Changes (1)

US Treasuries

As for US Treasuries, medium- and long-term bonds rose. The February Personal Consumption Expenditures (PCE) price index, released on Thursday, is expected to keep the core index high.

foreign exchange

In the foreign exchange market, the dollar has weakened across the board against the 10 major currencies. It was weighed down by the end-of-quarter flow and speculation that the US rate hike cycle was nearing its end. The dollar traded against the yen in the high 132 yen range.

The euro rose as Germany’s inflation data bolstered expectations that the European Central Bank (ECB) would need to tighten monetary policy.

Germany’s Inflation Declines in March on Falling Natural Gas Prices (1)

“The dollar is likely to remain under pressure if the banking sector avoids another severe shock, with economic headwinds and policy rates particularly pronounced in the U.S.,” said Steven Englander, global head of G10 FX research at Standard Chartered. We see the combination of a flattening trajectory and lower risk premiums as negative for the dollar,” he said in a note.

“The recent banking woes have significantly heightened uncertainty,” Bank of America (BofA) strategists led by John Singh said. “The recent turmoil has calmed down a bit, but given the nature of these banking sector surprises, nervous developments are understandable,” he said.

crude

New York crude oil futures rallied to a two-week high. Buying rose on the back of export woes and generally bullish sentiment in financial markets.

In France, protests against pension reform have affected fuel production and logistics, forcing the government to release its strategic stockpile. In addition, conflicts between Iraq and the Kurdish Autonomous Region continue, and crude oil shipments from Turkey remain suspended.

The West Texas Intermediate (WTI) May contract on the New York Mercantile Exchange (NYMEX) closed at $74.37 a barrel, up $1.40 (1.9%) from the previous day. London ICE North Sea Brent May delivery rose 99 cents to $79.27.

Money

The New York gold futures market rebounded. Gold futures for June delivery on the New York Mercantile Exchange (COMEX) closed at $1,997.70 an ounce, up 0.7% from the previous day. The spot price rose 0.8% to $1,980.94 as of 4:22 pm New York time.