While the US dollar clearly weakened against other major currencies following the FOMC announcement, emerging markets showed mixed results. The USD/RUB rate for example moved even higher, while others like the USD/MXN and USD/ZAR pairs indeed used this time to recover.
Gold and Bitcoin also seemed to have benefitted from the rather dovish monetary policy statement with Bitcoin at times trading again close to $59k. In terms of altcoin, especially Cadano, the number three in terms of market capitalization extended its rally and was by Thursday morning up by almost 25 per cent over the past week and is now in total valued more than twice as high as the long-time number three Ripple.
US stock market indices erased most of the post-FOMC gains by Friday morning as yields on the US Treasury Note benchmark jumped to the highest level since early 2020, surpassing 1.7% just a day after a rather dovish Fed policy announcement potentially putting even more pressure on monetary authorities.
The Bank of England (BoE) is seen to be rather relaxed about rising yields in the markets and analysts do not expect significant changes to be announced on Thursday.
European market indices were overall upbeat with the Germany 30 index reaching an new all-time high, while the Europe 50 index reached for the first time on Wednesday a new all-time high this year, surpassing the pre-pandemic record from February 2020.
One of the most hyped stocks over the past few days seems to be the German auto maker Volkswagen, whose shares received tremendous investor support after recent strategic announcements to pivot into producing own battery capacities for its EV line-up as well as moves to expand its software. By Thursday morning preferred shares performance was up at times by 31 per cent compared to the market close from last week.
On Thursday the EU trade balance will be released and then on Friday German producer price index (PPI) data for February can be expected.
The outcome of the last FOMC session on Wednesday was seen as positive for the markets with indices racing higher around the time of the announcement. However, by the time the European trading session started on Thursday indices again headed lower erasing most of the gains from the time of the policy announcement.
Especially chip stocks (US Semiconductors ETF +0.95%) continued to recover, while utilities stocks (US Utilities ETF -1.55%) clearly underperformed.
Indices turned however sharply lower by the time the European trading session started on Thursday morning with yields on US Treasury Notes spiking higher and thus raising fears over deteriorating funding conditions despite the Fed’s earlier reassurances.
On Thursday earnings from companies including FedEx, Dollar General and Nike can be expected.