Today the will take place Fed meeting - 22.3.2023

On Tuesday, the US dollar index stopped its 3-day decline and remained almost unchanged. It is trading at 103 points ahead of today's Fed meeting. According to forecasts, the rate may be increased by 0.25% to 5% from the current level of 4.75%. The US dollar has weakened over the past 4 weeks as investors believe the Fed rate will not exceed 5.25% in the end. Moreover, it can be reduced again to 4.5-4.75% already at the end of this year, subject to a reduction in inflation. Recall that in February 2023, US inflation decreased to 6% y/y from 9.1% y/y in June 2022. The UK Consumer Price Index for February was published this morning. It grew by 10.4%. This slightly strengthened the pound, as high inflation increases the likelihood of a 4% rate hike by the Bank of England at its March 23 meeting.

Bitcoin quotes have stopped rising and are trading just above the $28,000 mark. For 7 days it rose by 13%. The growth leader among the most liquid altcoins was XRPUSD (Ripple), which rose in price by almost 23%. Players actively bought cryptocurrencies amid problems in the banking sector due to the risks of bankruptcy of Silicon Valley Bank, Signature Bank and Credit Suisse, and others.

Yesterday, US stock indices rose. Sales in the American housing market Existing Home Sales in February were much better than forecasts. Treasury Secretary Janet Yellen reassured investors, saying that the banking sector in the US has stabilized thanks to government support. First Republic Bank jumped nearly 30%, PacWest Bancorp up 15% and Bancorp up almost 19%. Tesla shares rose 7.8% on strong quarterly sales in China and a corporate rating upgrade by Moody's. Against the backdrop of rising oil prices, the sectoral index S&P 500 Energy (+3.4%) became the growth leader. Shares of Exxon Mobil Corp added 4.5% after a positive evaluation by Morgan Stanley. A significant positive factor for the stock market could be a moderate increase in the Fed's rate.

On Tuesday, oil prices rose for the second consecutive day. The main reason for this was the stabilization of the banking sector in the United States thanks to government support. This significantly reduced the risk of a global financial crisis and a decline in fuel demand. In addition, on April 3, a meeting of OPEC+ is expected, where additional oil production cuts may be considered in the event of a significant drop in prices. Recall that on Monday, Brent updated its minimum since December 2021 and reached $70 per barrel. Today, oil is correcting slightly downwards. This is due to data from the American Petroleum Institute on an increase in its reserves in the United States by 3.26 million barrels over the week.

Natural gas in Europe on ICE Dutch TTF is currently trading at around $470 per 1000 cubic meters. It has not been able to hold below $450. The quotes for American gas on Henry Hub are trading at around $2.37 mmBtu (million metric British thermal units).