Anticipation of the Fed’s decision casts a shadow over risk appetite today

© Reuters Anticipation of the Fed’s decision casts a shadow over risk appetite today

  – Wednesday’s trade witnessed a clear decline in risk appetite among investors, with the market’s focus entirely on the US Federal Reserve’s interest rate decision today, and then Governor Jerome Powell’s press conference, where he will clarify some signals about the direction of monetary policy in the coming period , and regarding. The following is the evolution of risk appetite for the most prominent assets traded on the markets:

First: Risk appetite and equity markets:

Risk appetite saw a clear decline in most global stock markets, amid investor caution, coinciding with their anticipation of the release of US data and the US Federal Reserve’s decision, which will have a significant impact on stock market trading.

European shares saw a divergence in their performance, as the German and French stock indices fell marginally, while the UK stock indices saw stability, trading close to yesterday’s closing level.

Meanwhile, US stock index futures fell in pre-trade, while Japanese and Chinese stock indexes closed higher.

Second: Risk appetite and the US dollar:

The US dollar continued to decline since the start of early trading in today’s session, as it was subjected to selling operations in anticipation of the US Federal Reserve’s decision and Powell’s remarks afterwards, which would greatly affect the dollar’s trading.

Expectations now suggest the Fed could raise interest rates by 25 basis points, but markets are also very focused on Powell’s comments, as he could signal the end of the monetary tightening cycle.

At the same time, interest rates fell dramatically, putting more downward pressure on the US dollar.

Third: Appetite for risk and gold:

Gold witnessed a marginal decline in early trade, but managed to erase those losses as a result of the significant decline in the US dollar and US Treasury yields, recovering to settle near yesterday’s closing level as the release of the Federal Reserve’s decision approached , as risk appetite declined significantly and investors turned to gold as a safe haven.

Fourth: Appetite for risk and oil:

Oil contracts rose marginally, pending the OPEC+ decision today on production volumes for the month of March, but the data on the decline in oil production in Iraq – one of the members of the organization – as well as the continued decline in Nigerian production, in addition to the news that OPEC + oil production fell. Of the target of 920,000 barrels per day, it provided some support for prices.

The effect of risk appetite on currencies and commodities:

Risk appetite and the US dollar: – which measures the performance of the US currency against 6 major currencies – declined by 0.24% to 101.86 points.

Risk appetite and gold: Prices edged up 0.09% to $1,930.11 an ounce, with precious metal futures also up 0.06% to $1,946.40 an ounce.

Risk appetite and oil: Crude futures rose 0.42% to $85.81 a barrel, and West Texas Intermediate crude futures rose 0.60% to $79.33 a barrel.

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