Connect with us


What awaits the market after the FED meeting? Uncertainty and crisis

igor m



market after FED meeting

Everyone is watching the FED stock market announcement closely. The attention of the markets is gradually shifting from inflation to the coming recession. The euro has fallen due to cuts in Gazprom’s gas supplies

What does the market have in store after the FED meeting? With the US interest rate hike this week and growing uncertainty over the Fed’s further policy tightening course, the dollar on Tuesday held close to its recent two-decade highs, while the latest gas supply cut in Russia kept the euro under pressure.

FED rate hike and stock market

FED interest rates and stock markets are closely linked. The U.S. Federal Reserve begins a two-day meeting later today and is expected to raise interest rates by 75 basis points. But many traders wonder if the slowing economy could shift the focus away from inflation and signal a slower pace of rate hikes in the future.

Futures contracts tied to the Fed’s discount rate show that rates will peak in January 2023, a month earlier than February, which they indicated last week, while long-term Treasury bond yields are down about 80 basis points from the highs of mid-June.

That helped push the dollar back about 2.8 percent from its 20-year high of 109.29 against a basket of currencies less than two weeks ago. By 08:30 GMT, the dollar had stabilized since the start of the day at 106.5, while against the euro it strengthened slightly to $1.0219.

However, while Fed rate expectations are waning, most analysts maintain an optimistic view of the dollar, noting signs of a global economic slowdown. Such concerns were reinforced Monday by a profit warning from U.S. retailer Walmart.

This followed several softer-than-expected U.S. and European data releases. Francesco Pesole, a currency strategist at ING Bank, attributed the dollar’s loss of momentum to the actions of traders who cut excessively “long” U.S. dollar positions.

“The trigger (for a flattening of positions) could have been a reassessment of the timing of the rate caps and a discussion of rate cuts,” Pesole said.

“But the Fed has less opportunity for dovish surprise compared to the ECB … Fed rate pricing is more or less in line with the regulator’s dot plot and inflation/economic growth forecast,” he added, referring to the chart reflecting each Fed rate hike as forecast by officials themselves.

The euro’s rise continued to be held back by uncertainty about Europe’s energy security as Russia said gas flows to Germany via the Nord Stream 1 pipeline would drop to 33 million cubic meters per day starting Wednesday. This is half of the current flow, which is already only 40 percent of normal capacity.

But the single currency’s reaction to the news has so far been subdued, even though it raises the risks of fuel rationing in Europe and an economic downturn.

Pesole said that the euro is preparing for bad news on the gas front, noting that “the reaction function to the incoming news is not as sharp and will not cause the same volatility as a month ago.

However, the euro could weaken if markets start to actively assess the European Central Bank’s impending rate hike – they have already lowered expectations for September, now, estimating a 39 basis point increase from 50 basis points last week.

Commodity prices are supporting Australian and New Zealand dollars. The Australian dollar hit a one-month high of $0.6984 as iron ore hit a two-week peak and traders awaited inflation data that could show a 6.2 percent annualized rise in consumer prices, the fastest in more than three decades.

“Depending on the data, a slight rise in the Australian dollar is possible,” ANZ Bank analysts said. “A 50 basis point hike from (the Reserve Bank of Australia) next week is almost a foregone conclusion – the main risk is a larger hike.”

In other markets, cryptocurrencies rebounded from last week’s gains. Bitcoin was worth $21,100, its lowest since July 18. Ether also reached its lowest level since July 18 at $1,421.

Market reaction to FED announcements is always bright, so keep an eye on the situation.


ITB (International Trading Brachium) Broker Announced Its YouTube channel

igor m



ITB (International Trading Brachium)

(Mahe, Seychelles-March 08, 2023) – ITB BROKER, LLC, an international forex broker, has announced that with our community growing, we believe that this will be the most effective medium to communicate with and so, we’re proud to announce the launch of ITB YouTube channel .

When a picture speaks a thousand words, How about a video?

  • Throughout our community building initiative, we strongly believe in video as our means of communication. Video has played a pivotal role in describing our futuristic services to our audience and in communicating our disruptive vision to potential traders or investors.
  • Over the next few weeks, we will be launching interesting videos on upcoming ITB features, bonuses, partnership or IB announcements and financial market expert interviews.
  • YouTube is a great place to pick up forex trading tips and learn how to use them in the real world.

There are a number of YouTubers that make great educational videos, perfect for beginners or those considering taking up forex trading. ITB group with over 10 years of financial experience provides you with useful tips and hints of forex trading via its  YouTube channel.

About ITB

ITB Broker or ITBFX is a leading provider of online foreign exchange (FX) trading, CFD trading, and related services.

Founded in 2017, the company’s mission is to provide enthusiastic traders with access to the world’s largest and most liquid market by offering innovative trading tools, applying excellent trading platform, meeting strict financial standards, and striving for the best online trading experience in the market.

In addition, ITB offers educational courses on FX trading and Cryptocurrencies on academy section of ITBFX website.

Continue Reading


U.S. budget deficit totaled $262 billion in February 

igor m



U.S. budget deficit

According to a report from the U.S. Treasury Department, the U.S. budget deficit in February was $262,434 billion compared to a $38.8 billion deficit in January. The Dow 30 also had problems.

Analysts at DailyFX suggested that the nation’s budget deficit for February was expected to be $256 billion. A year earlier, in February, the U.S. posted a budget deficit of $216,590 billion.

According to the GAO report, U.S. government spending rose 3.5 percent year over year last month to $524.548 billion, while revenue, in contrast, declined 9.5 percent to $262,114 billion.

Earlier, the U.S. edition of the Washington Post published an editorial stating that the new draft budget proposed by the Biden administration undermines U.S. national security and its ability to invest in the future, because it suggests a further growth of the U.S. national debt.

The WP editorial board noted that the new draft budget assumes a $2 trillion budget deficit, including due to the high cost of providing health insurance to the elderly of the baby boomer generation.

Earlier we reported that the EU has agreed to reduce energy consumption by 11.7% by 2030.

Continue Reading


The EU has agreed to reduce energy consumption by 11.7% by 2030

igor m



reduce energy consumption

The European Union has agreed to reduce the bloc’s energy consumption by 11.7 percent by 2030, Reuters reported.

“This will mean a real change in favor of the climate and to the detriment of Putin,” the Danish Niels Fulsang, the European Parliament’s lead negotiator, told the agency.

Initially, in 2021, the EU proposed to reduce consumption by 9%, but in May 2022, against the background of events in Ukraine, increased the target to 13% to quickly abandon Russian energy, writes Forbes. The European Parliament considered it necessary to reduce consumption by 14%. The DAX Index also had problems.

Some EU countries have continued to insist on a 9% cut. An all-night negotiation between the EU and the European Parliament resulted in a compromise: the energy consumption of EU end-users, such as households and businesses, must be 11.7 percent lower than expected in 2030.

The agreement must pass final approval by the European Parliament and EU countries before it can become legally binding.

Earlier, we reported that consumers expect lower inflation in the eurozone, higher wages.

Continue Reading


©2021-2023 Letizo All Rights Reserved