At the start of this week, markets were highly focused on central bank meetings from the Fed, BoJ, BoE, and PBoC. The Fed was the standout, surprising the markets with a 50 basis point rate cut, while the other central banks held steady. This unexpected cut was well received by the markets, despite Fed Chair Powell’s speech being less dovish than the rate decision itself. The dot plots and statement indicated that nearly all FOMC members supported the 50 bp cut, and markets now expect another 50 bp rate cut before the end of 2024.
Following the Fed’s decision, the U.S. Dollar dropped to 100.2, and stock markets surged. The Dow Jones (DJI) and S&P 500 (SPX) both hit new all-time highs, while the Nasdaq 100 (NDX) rose 2.56% ahead of the weekly close. Commodities followed suit, with gold reaching a new all-time high at $2,615 and silver climbing above $31. Brent crude oil also rebounded from $70, rising to the $74 level.
Cryptocurrencies were among the best performers, with Bitcoin rising to $64,000 on Friday. Ethereum crossed $2,550, and other major altcoins also saw strong gains in the aftermath of the Fed’s decision.
In the currency markets, the weakening Dollar supported gains in most major currencies except the Japanese yen. EUR/USD and GBP/USD reached key resistance levels, while USD/JPY climbed to 144, its highest level since early September, as the yen weakened.
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