Inflation -- and rate hike -- fears have investors wary

05 May 2018, 01:29 | Andres Norman

Moving on up to target

Market Update: Stocks Retreat as Inflation Report Builds Hawkish Case for Federal Reserve

"There wasn't any particular news to get it going other than the Fed staying the course, and that contributed to the slide in stock prices", said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in NY.

"The description of the inflation target as "symmetric" could be interpreted as a sign that officials will tolerate inflation rising modestly above 2 percent over the coming months", Andrew Hunter, US Economist at Capital Economics, said in a note.

The Federal Open Market Committee chose to keep rates steady at its meeting on May 2, signalling that it will be patient in implementing future hikes.

The statement showed the central bank's confidence over inflation, acknowledging that core inflation rate have moved close to the central bank's 2-percent target.

On growth, they remained pretty much optimistic... It added that risks to the outlook appear roughly balanced, removing a previous reference to "near-term risks". "If.wages come out a little bit stronger than expected, I think the euro tests $1.19", Innes said. The FOMC vote was unanimous, and the next such meeting is scheduled for June 12/13. The uncertainty is about the fourth rate hike. "That's negative for the dollar because ... the dollar needs higher real rates to essentially pull in the funding from the rest of the world". In this regard, the Fed seems to be telling the markets that it won't overreact, possibly because abrupt and aggressive monetary tightening could jeopardize the economic expansion and the ongoing recovery in corporate earnings.

"Markets are pretty much focused on the symmetric language, that's kind of code for willing to let them overshoot their inflation target", said Mark McCormick, North American head of fx strategy at TD Securities in Toronto.

Mails Show Lawyer Veselnitskaya In Close Communication With Top Russian Officials
The dossier contains numerous allegations of Russian ties to Donald Trump , his associates and the Trump campaign. The alleged tax fraud scheme was exposed by Sergei Magnitsky, a Russian lawyer who died while jailed in 2009.

Ramsey wants to win Europa League for Wenger
I will continue to work, that is for sure. "Honestly it's not something which will stop me doing what I am doing at the moment". Vieira represented Arsenal on 383 occasions, and won three Premier League titles with the club and three FA Cups.

Market concerns vanish as Apple posts best-ever second quarter
Apple's second quarter revenue included $9.1bn from its services business, which includes Apple Music, the App Store and iCloud. Pushing Apple to these record numbers was strong demand for its iPhone brand which were up 3 per cent on 2017.

"Officials remain on course to raise rates again in June and we expect two further 25 basis point rate hikes in the second half of this year", according to Hunter.

Gold is finally trading higher today.

Technology sector results so far " at least from the likes of Amazon, Alphabet, Microsoft, Samsung and SAP" have broadly beaten forecasts for the first quarter, and overall aggregate USA earnings growth is tracking seven-year highs of nearly 25percent.

The euro slipped slightly after the inflation numbers but recovered and rose 0.3 per cent to US$1.9986.

We now look ahead to this morning's inflation data, one of the most significant economic data releases when it comes to European Central Bank policy making. Partly, this support and relief rally in the dollar has already taken place and thus the upside momentum on this front could be limited going ahead.

Anecdotal evidence suggests short dollar bets may be far bigger, thanks to a slow moving allocation away from the greenback in recent years among large institutional investors.



Other News

Trending Now

Royal Dutch Shell Well Fed, but a Little Gassy
Oil prices have been bouncing back over the past year, helping Shell triple bottom-line profits to £8.5 billion in 2017. Shares of Royal Dutch Shell stock traded up GBX 21 ($0.29) during trading on Wednesday, reaching GBX 2,502.50 ($34.90).

Mahila Congress Workers Highlight 'rape' at Jan Aakrosh Rally
A Mahila Congress leader from Allahabad said, "The situation in the country, especially in Uttar Pradesh, is very bad". The former prime minister reiterated that the promises made by the present government were not delivered yet.

World Cup windfall for African Big Five
Apart from all these details, EA has also released a trailer for this mode which can be spotted in the space above. You can read and see more of said stadiums here.

Europa League: Atlético Madrid beat Arsenal, advance to final
He served the first match of his suspension as Atletico completed a 2-1 aggregate win on Thursday. The final is billed to hold on the 16th of May at the Parc Olympique Lyonnais in France .

Oil slips after USA rig count rises; Iran concerns cap downside
Brent crude futures, the global benchmark, dipped 39 cents, or 0.5 per cent, to $74.25 a barrel at 0305 GMT. In Texas, oil production climbed to an all-time high in February, the federal government said.

GOP-led House panel clears Trump campaign in Russian Federation probe
Trump in his post , Twitter wrote: "No evidence that the campaign trump was in collusion or coordinated with Russian Federation ". Meanwhile, the Senate Intelligence Committee's investigation is moving ahead, along with special counsel Robert Mueller's probe.

Why Chiefs fans should be excited about Breeland Speaks
Kansas City could still use help at cornerback, so general manager Brett Veach may not be done with that side of the ball. The Chiefs did not have a first-round pick after trading it away last season to select quarterback Patrick Mahomes II.

Fight Over Alfie Evans, a Brain-Damaged Baby, Divides UK
Alfie's parents repeatedly appealed against rulings given in favour of the doctors, and took the case to the Supreme Court. The parents' campaign was backed by the pope and Christian groups, which helped draw global attention to the case.

It's IN for top recruit IN Hoosier State, Romeo Langford
An anxious crowd awaits tip-off between Romeo Langford's New Albany Bulldogs and Trayce Jackson-Davis's Center Grove Trojans. The entire basketball world has been waiting for 5-star guard Romeo Langford to make his college decision.

Real Madrid set for crucial Champions League tie against Bayern Munich
Tonight's match could be Bayern boss Jupp Heynckes' last in Europe as he will be eplaced by Niko Kovac at the end of the season. Both teams had plenty of attacking intent, but it was Bayern that had more chances up through the half-hour mark.