Dollar dropped against its rivals, Treasury prices rallied and US stocks climbed after the Fed raised interest rates for the third time since the financial crisis

  • The US Federal Reserve raised the target range for the federal funds rate to 0.75 per cent to 1 per cent, the third rate increase since the global financial crisis. Fed policymakers stuck with the previous median projections that there would be a total of three interest rate hikes this year. The US central bank forecasts a 2.1 per cent rate of economic growth in 2017 and next year, slipping to 1.9 per cent in 2019. Inflation is forecast to reach 1.9 per cent this year and 2 per cent in 2018 and 2019. Unemployment is projected at 4.5 per cent in 2017, 2018 and 2019, unchanged from a December forecast.
  • US Treasury prices rallied and the dollar came under pressure after the Fed’s interest rate decision. The yield on the benchmark 10-year Treasury note fell 10 basis points to 2.50 per cent. The yield on the monetary-policy sensitive 2-year Treasury note was down 9 basis points to 1.30 per cent.
  • The dollar was up 1.2 per cent against the euro at $1.0730. The US currency was 1.2 per cent weaker against the yen at Ұ113.36. The UK pound was 1.2 per cent firmer versus the greenback at $1.2296. The dollar index, a measure of the dollar’s performance against a basket of half a dozen peers, was down 1.1 per cent at 100.60.
  • Mark Rutte’s centre-right PVV party came first in Wednesday’s parliamentary election, easily beating off a challenge from Geert Wilders’ far-right Party for Freedom. The yield of the Dutch 10-year bond fell 5 basis points to 0.66 per cent.
  • Australia’s S&P/ASX 200 edged up 0.3 per cent to 5,774. Hong Kong’s Hang Seng slipped 0.2 per cent to 23,792.85. On the Chinese mainland, the Shanghai Composite finished 0.1 per cent higher at 3,241.76.
  • European stocks markets made moderate gains. The pan-regional Stoxx 600 index gained 0.4 per cent to finish at 375.10. The UK’s FTSE 100 closed 0.2 higher at 7,368.64. The Xetra DAX in Frankfurt edged up 0.2 per cent to 12,009.87.
  • On Wall Street, the S&P 500 jumped 0.8 per cent to 2,385.26. The Dow Jones Industrial Average added 0.5 per cent to 20,950.10. The technology-focused Nasdaq Composite advanced 0.7 per cent to close at 5,900.05.
  • Inventories of US crude fell by 0.2 million barrels in the week ended March 10, the first decline this year. At 528.2 million barrels, stocks of US crude are above the upper limit of the average range for this time of the year. Brent, the international crude benchmark, settled 1.9 per cent higher at 51.91 dollars per barrel, while West Texas Intermediate, the US oil marker, rose 2.4 per cent to settle at 48.87 dollars per barrel. The oil rally came after Saudi Arabia, the world’s biggest oil exporter, affirmed in a statement on Tuesday its commitment to OPEC’s cuts to stabilise the global oil market.

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