Some significant changes have occurred in global markets this week. Harsh bear has influenced the crypto industry, causing other markets to struggle. How have Forex, Stocks, Crypto, and commodities performed this week? Our weekly overview will summarize this week’s market trends and outcomes.
Forex Weekly Overview
The U.S. dollar rose in early Asian trade on Friday, rebounding from weekly lows after falling for two straight days on the Federal Reserve’s decision to raise interest rates.
The U.S. dollar index, which tracks the greenback against a basket of other currencies, was up 0.57% at 104.014 by 12:49 p.m. ET (4:49 a.m. GMT).
USD/JPY was up 1.30% at 133.93. The yen weakened sharply earlier in the day after the Bank of Japan (BOJ) said it would maintain ultra-easy monetary policy despite rising inflation. At the same time, central banks worldwide maintained monetary policy tightening.
AUD/USD lost 0.41% to hit 0.7016 and NZD/USD lost 0.33% to hit 0.6341.
USD/CNY shed 0.02% to hit 6.7014, while GBP/USD lost 0.38% to 1.2304.
Central banks worldwide are aggressively tightening monetary policy to curb rising inflation.
The Federal Reserve on Wednesday announced its largest rate hike since 1994. The Swiss National Bank also unexpectedly raised interest rates by 50 basis points on Thursday, while the Bank of England raised rates on the same day to 1.25%.
On the data front, U.S. initial jobless claims fell to 229,000 for the week ended June 11, down slightly from 232,000 the week before.
Stocks Weekly Overview
U.S. stock indexes closed sharply lower on Thursday as global central banks took steps to curb rising inflation after the Federal Reserve raised interest rates by the most since 1994, fueling recession fears.
The benchmark S&P 500 fell for the sixth time in seven sessions. Stocks rose on Wednesday as the U.S. Federal Reserve slashed interest rates by 75 basis points, as expected, to help the index weather its longest one-day loss since early January.
But hikes in Switzerland and Britain on Thursday reignited fears that central bank efforts to rein in inflation could lead to a sharp slowdown in global growth or a recession.
The Dow Jones Industrial Average lost 741.46 points, or 2.42%, to 29,927.07, the S&P 500 lost 123.22 points, or 3.25%, to 3,666.77, and the Nasdaq Composite lost 453.06 points, or 4.08%, to 10,646.10.
Each of the S&P’s 11 major sectors was lower, although defensive consumer staples outperformed the broader market as Walmart, General Mills, and Procter & Gamble were A handful of leaders in just 14 sectors in the S&P 500 components ended the session better.
Growth stocks were hit hard, with the S&P Growth Index down 3.75%, while the Nasdaq Composite lost 4% or more for the fifth time since early May.
Hopes of a soft landing for the economy are fading, and analysts at Wells Fargo now see a more than 50% chance of a recession. Other banks warning of rising recession risks include Deutsche Bank and Morgan Stanley.
The benchmark index, down about 23% this year, recently confirmed that a bear market began on Jan. 3, while the Dow Jones Industrial Average was on the verge of confirming its own.
Crypto Weekly Overview
The crypto market crash has been around since May, but it hasn’t left yet. Almost all cryptocurrencies have lost value and continued to struggle this week. However, Wednesday’s Fed meeting shifted the market’s direction slightly to the upside.
After Federal Reserve Chairman Jerome Powell announced that he would raise interest rates by 75 basis points, the price of Bitcoin briefly surged to $22,520 before falling back to $21,500.
The altcoin market also saw a brief price surge as dire predictions of a possible 100 basis point rate hike failed to materialize. The market essentially got its hopes up from the June 15 Federal Open Market Committee (FOMC) meeting.
Traditional markets reacted positively to the announcement, with the S&P 500, Dow, and Nasdaq all trading in the green for the day, but traders should be wise to watch how the markets close today and open tomorrow.
Predictions about when the Fed would start cutting rates came shortly after Powell announced a 75 basis point rate hike, with the consensus that rate cuts would begin in 2024.
The rise in interest rates was primarily driven by rising inflation, which according to the latest Consumer Price Index (CPI), rose 8.6% year-on-year, above analysts’ forecasts.
Some analysts have begun to speculate that the Fed’s highest rate hike in 28 years is due to the central bank’s efforts to maintain its lead and create enough room to pause future rate hikes if economic conditions permit. Deterioration.
The total cryptocurrency market cap is now $931 billion, with Bitcoin dominance at 44.5%.
Commodities Weekly Overview
Oil erased early gains after a day of losses on Thursday on U.S. interest rate hikes, but tight supply capped losses.
Brent crude futures were down 45 cents, or 0.4 percent, at $118.06 a barrel by 0906 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 44 cents at $114.87, It also fell 0.4%.
Both contracts were broadly within the previous session’s range.
Prices fell more than 2% overnight, the biggest gain since 1994 after the Federal Reserve raised interest rates by 0.75%.
The U.S. dollar index fell from a 20-year high, easing downward pressure on oil prices. A stronger dollar makes dollar oil more expensive for holders of other currencies and limits demand.
Investors focused on tight supplies as Western sanctions limited access to Russian oil.
In Libya, oil production has plummeted to 100,000 to 150,000 barrels per day (BPD), a fraction of last year’s 1.2 million BPD, an oil ministry spokesman said on Tuesday.
That’s because supply is already tight; while the IEA expects demand to grow by more than 2% in 2023 to a record 101.6 million barrels per day.
Optimism that Chinese oil demand will rebound as China eases COVID-19 restrictions supports the price outlook.
U.S. crude oil and distillate inventories rose in the week to June 10, while gasoline inventories fell, the U.S. Energy Information Administration said.
Still, Bernstein estimates it will take 48 days for global inventories to meet demand, below the long-term average of 55 days.