Morning Recap Thursday 27 January 2022
Global Markets Update
U.S. MARKETS
Equity markets closed mostly lower overnight, with the S&P 500 down -0.2%, Dow Jones down -0.4% and NASDAQ closing flat. The Fed held the target range for its benchmark policy rate unchanged at 0-0.25% as expected, however, declared it will conclude asset purchases on schedule in early March and will soon be ready to raise the target range for the federal funds rate and commence the process of balance-sheet reduction thereafter, citing inflation well above its 2% target and a strong job market, with Fed Chair Jerome Powell reinforcing that the Fed is committed to ensuring high inflation doesn’t become entrenched and adding that he backs a March liftoff and won’t rule out a hike every meeting, while noting he’s inclined to boost his forecast for inflation by a “few tenths. U.S. merchandise-trade deficit unexpectedly widened in December to a fresh record as imports continued to rise, outpacing shipments overseas.
Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 1.156% and the 10-Yr yield at 1.869%.
EUROPEAN MARKETS
European equity markets closed higher overnight, with the Stoxx Europe 600 up +1.7%, as concerns over omicron faded after Denmark announced it will end virus restrictions next week and reclassify Covid-19 as a disease that no longer poses a threat to society and Austria announced it will end a lockdown for unvaccinated people next week as the latest wave of infections isn’t overwhelming hospitals. The U.K. FTSE 100 was up +1.3% and German DAX gained +2.2%.
ASIAN MARKETS
Asian equity markets closed mixed overnight, with the Shanghai Composite up +0.7%. Hang Seng up +0.2% and both KOSPI and Nikkei 225 declining -0.4%.
WTI oil is trading at US$85.31 a barrel. Iron ore price is at US$124.92 per ton. Spot gold is trading at US$1,848 per oz.
