Market Update – March 18 – BOE move, BOJ stay put – Stocks, Yields & Oil bounce

The BOE raised rates as expected by 25 bps to 0.75% but were less clear about next steps, strong US data (Claims, Housing & Phily Fed Index) helped US stocks (+1.25) to close higher (best 3-day gain since 2020) again as the USD cooled and Yields & Oil rallied (no immediate breakthrough in ceasefire talks).  Overnight  No change from BOJ  but JPY Inflation finally perking up. Asian stocks positive (Nikkei +0.65%). Japan & Australia added sanctions, Biden to call Xi, Putin talked to Erdogan, Blinkin said “war crimes have been committed in Ukraine”.

USD (USDIndex 98.12). Tested to 97.70 yesterday as weekly decline continues.   
US Yields 10-yr up to 2.192% on close – down to 2.178% now.
Equities – USA500 +53.8 (+1.23%) and over 4400 to 4411. US500 FUTS flat at 4385 now. Tech & Fin rallied (FB & AMZN +2.0%, TSLA +3.73%, Occidental + 9.47%) and Berkshire Hathaway A-Shares breached $500,000 each! 
USOil – Rallied back over $100.00 yesterday. to test $104.80 (200HR MA) now.  
Gold – rallied to test $1950 yesterday, from Wednesdays flirt with $1900, trades at $1934 now    
Bitcoin holds the break of $40,000 yesterday, trades at $40,600 now. 
FX marketsEURUSD back to 1.1078, unable to hold breach of 1.1100, USDJPY testing 119.00 & new 5-year highs at 118.85 and Cable having spiked over 1.3200 pre- BOE yesterday back to 1.3150 now, from 1.3100.    

European Open – The June 10-year Bund future is down -5 ticks, while US futures are posting slight gains.  Gilts benefited yesterday from the BOE’s “dovish-hike”, but after the initial move lower in yields, we could see some consolidation today. The FTSE 100 futures is posting modest gains, after local markets got a boost from a drop in Sterling yesterday. The DAX is fractionally lower this morning as stagflation concerns make a come back.

Today – US Existing Home Sales, CBR Policy Announcements, Quad Witching, Speeches from Fed’s Barkin, Bowman & Evans. Call between US President Biden and Chinese President Xi.

Biggest FX Mover @ (07:30 GMT) AUDJPY (+0.52%) Rally continues after another big move yesterday from 84.60 lows Tuesday to test 88.00 now. MAs aligned higher, MACD signal line & histogram strong but cooling, RSI 73, OB but rising, H1 ATR 0.150, Daily ATR 0.980.

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Stuart Cowell

Head Market Analyst

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