STATE OF THE MARKETS

Stocks mixed amid hawkish Feds. US stocks closed mixed on Wednesday after the Feds signaled that it is ready to raise rates sooner to maintain price stability. Dow (-0.38%) and S&P (-0.15%) fell lower while Nasdaq (+0.02%) edged higher as the 10Y benchmark spiked back to 188 basis points. Cash demand sent the Dollar index past the 96.50 mark.

In the commodities market, crude continues to receive bids higher, as Russia-Ukraine tension remains, piercing $87.40/bl before settling around $86.73/bl as New York closed. Gold dived to $1814.85/oz after hawkish Feds sent more demand for Dollar. Elsewhere, iron ore climbed back to almost $130/tn as investors see more demand for the commodity in the US BBB plan.

In the FX space, King Dollar seized the helm of demand in the short and medium term accounts while sending Aussie and Yen to offers. In the long term accounts, Aussie and Dollar regained demand as Swiss and Euro lost bids.

On Thursday, markets look for earnings reports from Apple (AAPL), Visa (V), Mastercard (MA), Comcast (CMCSA), Danaher (DHR), MCDonalds (MCD), SAP SE (SAP) and Blackstone (BX) as well as the jobless claims in US labor markets.

OUR PICK – AUD/NZD

Re-enter when closed below 1.0680. We see Kiwi demand to exceed Aussie in the weeks to come as the pair now test 61.8 monthly retracement, circa 1.0690. Further rebound to test monthly downtrend line, circa 1.0780-1.0800, can’t be ruled out however. Closed below 1.0680 on the daily confirmed that bears are in charge. We plan to re-enter if we stop-out and only when the exchange rate closes below 1.0680 on the daily.