By Deepta Bolaky
Fed Chair’s Testimony and FOMC Minutes
The highlight of the week was the semi-annual monetary policy testimony by Fed Chair- Jerome Powell. The nonfarm payroll data scaled back rate cut expectations and, therefore, investors were looking for more clues to ascertain whether the Fed will join the global run towards easing policies.
After a relatively muted start of the week, equities rose on the dovish testimony and the FOMC minutes. We saw record highs on Wall Street.
In the local share market, the ASX200 was seen trading at levels close to an all-time high.
However, the momentum seems to ease towards the end of the week due to better-than-expected US inflation figures and a tweet from the US president on trade with China.
World Equity Indices (% Change)
Source: Bloomberg Terminal
In the FX market, the major currencies were firmer against the US dollar.
The Aussie dollar was stronger towards the end of the week at 69.75 US cents.
We saw an impressive recovery in oil prices despite the US Energy Information Administration trimming its forecasts for global demand for 2019. Bullish oil reports showing a more significant draw in crude oil inventories than expected and supply concerns supported the upside traction.
WTI and Brent Crude recovered strongly to the upside and are currently trading above $60 and $66 respectively.
The crypto market was set on a solid week of gains, but Fed’s Chair Powell put a lid on gains. The upsurge in the digital assets was broadly driven by the launch of Facebook’s cryptocurrency, Libra.
Jerome Powell expressed its concerns as Facebook’s push into the finance world. He stressed the risks to global financial stability due to the company’s user base.
Bitcoin, the bellwether of cryptocurrencies rose to a high of $13,171 before retreating to $11,390.
|Monday, 15 July 2019
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