Thursday 17th June 2021: Fed talks of tapering in 2023; Markets shook

Global Markets:

• Asian Stock Markets : Nikkei down 0.93%, Shanghai Composite up 0.21%, Hang Seng up 0.19%, ASX down 0.37%
• Commodities : Gold at $1809.35 (-2.80%), Silver at $26.93 (-3.16%), Brent Oil at $74.10 (-0.39%), WTI Oil at $71.88 (-0.37%)
• Rates : US 10-year yield at 1.560, UK 10-year yield at 0.808, Germany 10-year yield at -0.175

News & Data:

• (CHF) SNB Policy Rate -0.75% vs -0.75% expected
• (AUD) Unemployment Rate 5.10% vs 5.50% expected
• ECB’s Lane: Will Take A Long Time For Labour Market To Recover
• US housing market is short 5.5 million homes, NAR says

Markets Update:

Asian stock markets are trading mostly lower on Thursday, following the negative cues overnight from Wall Street as the Fed’s latest economic projections now point the first post-pandemic interest rate hike in 2023, well ahead of the projected timeframe. Seven officials expect a rate hike as early as 2022. The markets also remain tense amid the continuing high number of infections in most markets.

Mainland Chinese stocks closed higher. The Shanghai composite gained 0.2% while the Shenzhen component advanced 1.2%. The Japanese stock market is sharply lower on Thursday, extending the losses of the previous session, with the benchmark Nikkei 225 falling below the 29,000 mark. The Australian stock market is slightly lower on Thursday, with the benchmark S&P/ASX 200 staying just below the 7,400 level off all-time highs, as mining, technology and energy stocks fell, offsetting gains in the financial sector.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 91.438 as compared with levels below 90.5 seen earlier this week. Fed Chairman Jerome Powell downplayed any risk of an immediate interest rate increase as the central bank handed down the decision on Wednesday. He added that officials had begun a discussion about asset tapering and that two interest rate hikes are expected by the end of 2023.

Upcoming Events:

• 07:30 AM GMT – (CHF) SNB Monetary Policy Assessment
• 07:30 AM GMT – (CHF) SNB Policy Rate
• 08:00 AM GMT – (CHF) SNB Press Conference
• 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
• 12:30 PM GMT – (USD) Unemployment Claims