Stocks Edge Higher After Fed Comments – Nasdaq up 0-23%
US stocks extended an intraday gain and the VIX volatility index fell for the first time in four days after remarks from Fed chair Jerome Powell at Stanford University. As Wednesday’s session drew to a close the Dow Jones index was back to flat with the S&P 500 and NASDAQ indexes posting minor gains, up 0.11% and 0,23% respectively.
The yield on the 10-year US Treasury bond was little changed at 4.35% after touching 4.43% prior to Powell’s comments. Oil gained after OPEC+ extended supply curbs, WTI +0.4% to $85.50 with Brent crude +0.5% to $89.40 and gold neared $2300 as interest rates eased. USD/JPY rose 0.1% to 151.67 by New York close since trading as high as 151.95 earlier in the session. The big currency winner was commodity FX (again) thanks to rising prices in their underlying exports. AUD/USD +0.7% to 0.6562, NZD/USD +0.6% to 0.6007.
Jerome Powell Sticks to his Script
Stocks gained after Jerome Powell reiterated the Federal Reserve’s wait-and-see approach before the central bank embarks on rate cuts. The Fed Chair said recent inflation figures — though higher than expected — did not “materially change” the overall picture. He maintained that it will likely be appropriate to begin lowering rates “at some point this year.” Prior to him speaking, a report showing a slowdown in services and a drop in prices to a four-year low was enough to halt an initial slide in equity indexes. More than $16 billion in net long positions was added to S&P 500 futures last week and traders are naturally wary that we may be hitting overbought levels soon, although while the Fed sticks to its same dovish script many are calling for more topside potential.
Data Calendar Builds up Ahead of Non-Farms
The initial focus in the APAC session will be on the antipodes with Australian building approvals data due out alongside Kiwi building permits and ANZ commodity prices across the Tasman. In the European sessions we have Eurozone S&P Global Services PMI, PPI while the ECB publishes its account of March rate decision.The New York session sees the release of initial jobless claims and Challenger job cuts on the data front, and we have a plethora of Fed speakers scheduled with Loretta Mester, Alberto Musalem, Thomas Barkin, Patrick Harker, Austan Goolsbee are all slated to speak.
