Prospects of a more hawkish fed despite triggering a deeper recession pinned down all markets from stocks, commodities to crypto. Only dollar calmed before the storm.Updated time: 23 Nov, 2022, 15:06 (UTC+04:00)
Thursday’s session of Wall Street ended mixed with Dow Jones’ unchanged position and 0.3% loss apiece for Nasdaq and S&P 500 as fresh worries of deeper recession arose. The overall sentiment was triggered by Fed officials’ calling for more hikes after seeing weekly jobless claims fell more-than-expected - a strong signal of a remaining resilient job market. Fed officials suggested its benchmark rate would need to rise in a range of 5-7% as it is yet to reach a “sufficiently restrictive level” to cool inflation. The inversion of the 10-year yield and two-year yield also added concerns.
Oil prices were squeezed for the third consecutive day amid the on-going COVID-19 curbs in China and hawkish comments weighed down the market. Brent crude futures lost 3.3% to settle at $89.75 while U.S WTI crude futures slid 4.6% to $81.64 per barrel.
Gold prices rallied but were set for the weekly declines as investors were ready to take the rate hike’s effects from the Fed. Spot gold and gold futures were steady at $1,761.29 and $1,763.40 per ounce.
Dollar was on a rise together with its index up 0.3% to 106.687 as Treasury yields ticked higher and investors eyed Fed’s hawkish comments. Meanwhile, the pound traded lower at $1.1850, down roughly 0.53% on disappointment in the UK's government's latest budget that required tax increases and tighter public spending. The euro moved in tandem with the pound to settle at $1.0364 after dropping 0.3%. The greenback gained ground against the yen at 140.1650 while Aussie and kiwi dropped to $0.6682 and $0.6121.
Bitcoin and other major cryptos traded sideways. The largest cryptocurrency was recently up about 1% and hovering comfortably over $16,800 while Ethereum was changing hands above its support level of $1,200.