US markets were mostly flat, with the Dow Jones up +0.04% and S&P500 up +0.01%, as growth stocks remained under pressure after Fed delivered the biggest hike in interest rates since 2000, increasing benchmark rate by +50bps to 0.75-1%, and announced it would allow its holdings of Treasuries and mortgage-backed securities to decline in June at an initial combined monthly pace of $47.5bn, stepping up over three months to $95bn, while revising up inflation forecasts, predicting PCE price inflation of +4.3% in 2022, +2.5% in 2023 and +2.1% in 2024.
Long-dated U.S. treasury yields were lower, with the 2-Yr yield at 2.56% and 10-Yr yield at 2.84%.
EUROPEAN MARKETS
European markets were mostly higher with the Stoxx Europe 600 Index down -1.6%, UK FTSE up +0.8% and German DAX up +2.1%.
ASIAN MARKETS
Asian markets were mostly higher, with the Shanghai Composite up +4.6%, as China vowed to ease its regulatory crackdown and rolled back some strict pandemic-triggered restrictions after Covid-19 cases in Shanghai and Beijing continued to decline. Nikkei was up +1.6% after Japan’s cabinet approved a 2.7 trillion-yen additional budget to help households and firms hit by higher prices, and Kospi declined -0.3%.
COMMODITIES
WTI oil price gained +11.4%, as EU leaders agree to pursue a partial ban on Russian oil, forbidding the purchase of crude oil and petroleum products from Russia delivered to member states by sea but including a temporary exemption for pipeline crude, U.S. announced a plan to begin purchasing oil to refill the nation’s emergency reserve and investors cast doubt on OPEC’s ability to deliver scheduled hike as most member struggle with capacity constraints with oil ministers of Saudi Arabia and the UAE warning that spare capacity is decreasing in all energy sectors as producers slash investment.
