Thursday, December 12, 2019

Global stocks rise on Fed’s optimism; today’s focus will be on the UK’s general elections

Tags
  • Dollar
  • Gold
  • Yen
  • European Central Bank
  • Federal Reserve

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Market recap: Global stocks rise on Fed’s optimism; today’s focus will be on the UK’s general elections

US equities gain on Fed’s optimistic economic outlook. The Fed kept interest rates on hold while reiterating that next year’s economy will be favourable in the US despite ongoing global risks. More importantly, Fed officials were unanimous in its latest policy decision, and projections showed 13 of 17 officials do not see a change in interest rates until 2021 while 4 officials only see one rate hike in 2020. US Stocks gained on the announcement, with the DJIA, S&P500 and Nasdaq recovering from two days of losses.

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Dollar retreats as Fed signals looser regulation to help money market volatility. During his speech, Fed Chair Jerome Powell said that the Fed was open to changing regulations to help minimise volatility in the money markets. The greenback fell against all major currencies except the Australian dollar as a result. US Treasury yields also fell across the board.

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Safe haven assets gained ahead of UK elections and as the dollar fell. Gold gained as the dollar weakened and ahead of the UK’s general elections happening today. The yen also strengthened against the dollar.

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Meanwhile in Asia, equities are likely to track US gains today. The Nikkei and Straits Times Index opened Friday’s trading session higher, while Hang Seng futures also indicate that the Hong Kong index will likely gain on the day.

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Today’s highlight: ECB President Lagarde’s first monetary policy and the UK’s general elections. Markets will be busy today, with the European Central Bank (ECB) announcing its decision on monetary policy today at 8.45pm (GMT +8), and with the UK’s general elections happening today.