[Market Morning] The Fed Raised Interest Rates by 75 Basis Points as Scheduled, Powell's Words Triggered A Carnival in US Stocks, Gold Rose by More Than $20 In The Short Term, And The Dollar Fell Sharply
July 28. In early Asian trading, the US dollar was trading around 106.47. In the morning, the Fed raised interest rates by 75 basis points as scheduled, and Fed Chairman Powell's dovish comments stimulated people's hopes of slowing down the path of interest rate hikes; gold prices rose nearly 1% on Wednesday; oil prices rose Nearly 2.8%, benefiting from a reduction in U.S. inventories and a reduction in Russian gas exports to Europe; focus on U.S. second-quarter GDP data during the day.

On Wednesday, spot gold continued its upward momentum, once hitting the 1740 mark, and finally closed up 1.02% at $1734.57 per ounce; spot silver rose sharply, standing at the $19 mark, and finally closed up 2.65% at $19.09 per ounce.
Comment: Gold jumped nearly 1% on Wednesday, as the U.S. dollar and Treasury yields retreated after the Federal Reserve raised interest rates by 75 basis points. The U.S. central bank raised its benchmark overnight interest rate by 75 basis points in the early hours of Thursday in Beijing to cool inflation, the highest since the 1980s. It signaled it would "continue to raise" borrowing costs despite evidence that the economy is slowing.
Suggestion: long spot gold 1739.90 positions, target point 1751.20
The US dollar index rose and fell, falling below the 107 mark, and finally closed down 0.709% at 106.48; the 10-year US bond yield failed to hold 2.8% and closed at 2.785%.
Comment: The dollar fell against a basket of major currencies on Wednesday after the Federal Reserve raised interest rates by 75 basis points, as widely expected, and comments from Fed Chairman Jerome Powell stoked hopes for a slower path to rate hikes. The Fed raised interest rates by 75 basis points for the second time in a row to rein in inflation, noting that while the labor market remains strong, other economic indicators have softened.
Suggestion: short position of EUR/USD 1.02090, target point 1.01270
In terms of crude oil, the two crude oils fluctuated violently during the session. WTI crude oil stood at US$98 and finally closed up 2.75% at US$98.12 per barrel; Brent crude oil closed up 2.48% at US$107.12 per barrel.
Comment: Oil prices closed more than $2 on Wednesday as reports of lower U.S. inventories and Russian gas exports to Europe offset concerns about weaker demand and higher U.S. interest rates. U.S. crude inventories fell by 4.5 million barrels last week as exports surged to a record high. U.S. crude prices fell well below international benchmark Brent, the U.S. Energy Information Administration (EIA) said. The data showed that U.S. gasoline demand rebounded 8.5% in a week after a sharp drop over the past two weeks.
Suggestion: short the position of US crude oil 97.070, the target point is 92.380
The three major U.S. stock indexes rose collectively, the Dow closed up 1.37%, and the Nasdaq closed up 4.06%. Big tech stocks rallied across the board. Apple rose 3.42%, Amazon rose 5.37%, Netflix rose 6%, Google rose 7.66%, Facebook rose 6.55%, and Microsoft rose 6.69%.
Comment: U.S. stocks rebounded on Wednesday, with the Nasdaq posting its biggest one-day percentage gain since April 2020, as the Federal Reserve raised interest rates as expected and comments from Fed Chairman Jerome Powell reassured investors. In addition, upbeat quarterly reports from Microsoft and Alphabet brought further optimism about the earnings season. The S&P 500 closed at its highest level since June 8.
Suggestion: Go long on the Nasdaq index at 12556.000 and target at 12681.300
Fed hikes rates by 75bps again, reiterates high focus on inflation risks.
The Fed's actions today brought the June-July cumulative rate hike to 150 basis points, the largest since Paul Volcker took over the Fed in the early 1980s. The FOMC reiterated that it is highly concerned about inflation risks and said it would be appropriate to continue to raise the target range, and if risks could hinder the achievement of the inflation target, the Fed will adjust policy. The interest rate resolution was unanimously passed by FOMC members. In addition, the Federal Reserve will accelerate the reduction of its balance sheet in September as planned, with the monthly reduction cap on mortgage-backed securities (MBS) rising to $35 billion and the monthly cap on Treasuries to $60 billion.
Powell says next rate hike depends on data, denies U.S. recession.
Powell believes that the United States has not yet experienced a recession, but the possibility of a soft landing has significantly narrowed, and the GDP data has a trend of major revisions. Whether the next big rate hike will depend on the data, he said, a slower rate hike may also be appropriate. The Fed no longer provides forward guidance.
U.S. crude exports hit a new record; crude inventories fell more than expected
EIA data showed that U.S. crude oil inventories fell by 4.523 million barrels last week, a much larger-than-expected drop; inventories in the Strategic Petroleum Reserve fell by 5.604 million barrels to 474.5 million barrels, the lowest since the week of June 14, 1985. At the same time, U.S. crude oil exports rose by 789,000 barrels per day to 4.548 million barrels per day last week, and crude oil exports hit a record high. The agency believes that strong exports may continue in the coming weeks. That's partly due to the emergency release of U.S. strategic crude oil reserves to boost supply while the rest of the world is still grappling with shortages.
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