Fed committed to fighting inflation

Today's news headlines:

‘Powell vows to curb inflation with hikes that risk economic pain’. The Federal Reserve met market expectations last night by raising interest rates by 50 basis points and suggested similar hikes are on the table for June and July. Fed Chair Jerome Powell assured Americans that the central bank is committed to curbing inflation, even at the risk of causing ‘some pain’ to economic growth. Powell also pushed back on 75 basis-point hikes in the future—a policy move that some market participants were expecting. (Bloomberg)

‘ECB’s Panetta says Europe’s economy ‘is de Facto stagnating’. European Central Bank board member Fabio Panetta suggested economic growth in the eurozone has slowed significantly and may already be zero. He said, ‘GDP growth has slowed in Spain, halted in France and contracted in Italy’. What’s more, European powerhouse Germany has been experiencing low growth momentum since February. He added the ECB ‘cannot tame inflation…without causing high costs for the economy’. (Bloomberg)


Today

Global equities climbed after the Fed raised rates as expected and pushed back against larger rate hikes in the future. The US Dollar fell on a trade-weighted basis, and 10-year Treasury yields slid following the announcement. Brent continued its climb and trades around $110 a barrel.

Events

Chinese Composite Purchasing Managers’ Index (Apr): 37.2 (prev. 43.9)
German Factory Orders (Mar): -4.7% (est. -1.1%)
UK Services and Composite PMI (Apr): 9:30AM
Bank of England monetary policy announcement: 12:00PM
US Initial Jobless Claims: (Apr 30): 1:30PM​​​​​​​

Interbank rates:
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GBP/USD – 1.2522
GBP/EUR – 1.1830
EUR/USD – 1.0585
USD/CAD – 1.2750

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