The US dollar rebounded to 105.85 during Powell's hawkish speech and has since remained above 105.57. The yield has risen, and the stock market continues to be under pressure. The overnight Nikkei index was a notable exception, rising 0.5%. Due to concerns that overly aggressive central bank actions will harm recovery returns, the curves of Germany and the United States are further inverted. The curve reversed from -93 basis points to -104 basis points, the highest level since 1981.

The testimony of Federal Reserve Chairman Powell was stronger than expected. The yield of treasury bond bonds soared, Wall Street fell, and the dollar strengthened. Although Powell did not really say anything new when reiterating his policy slogan of "long-term higher", he did open the door to a return to a more radical 50 basis point rate hike, and the market jumped as a result. BlackRock believes that there is a "reasonable possibility" of the Federal Reserve raising interest rates to 6%.

The US dollar is currently at 105.66. The euro drifted to 1.0544, while the pound fell below the 4-month support of 1.1861 below the 20-week moving average. The yen surged to 137.54 due to the strengthening of the US dollar.

Stocks - US500 fell 1.53% to close below 4000. US100 fell -1.25%. The US30 index accelerated its decline below 33000, falling -1.72%.

Commodity - US Oil - fell sharply from $80.95 to $77.13 due to concerns that a more aggressive interest rate hike in the US would hit demand. API shows a decrease in US crude oil inventories, thus helping oil prices find a bottom, while a rise in the US dollar limits oil prices. Gold -1-week low (-1.9%) 1814.22.

Cryptocurrency - Bitcoin - $21936.

Today - Federal Reserve Chairman Powell testified to the House Finance Committee. US ADP and Bank of Canada interest rate decisions.

The maximum fluctuation in the foreign exchange market @ (07:30 GMT) XAUUSD (-1.9%) plummeted to 1809. The moving average is flattening, the MACD bar and signal lines are still far below 0, RSI 30 is flat, H1 ATR 2.32, and Daily ATR 18.25.

Andrea Pichidi

Market analyst