US stocks slip as Fed hikes rates
Dow logs another record
US broad stock market edged lower on Wednesday as Federal Reserve hiked interest rates 0.25 percentage points. The dollar weakened after Fed left 2018 forecast unchanged. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, dropped 0.7% to 93.433. The S&P 500 slipped less than 0.1% to 2662.85 dragged by financial shares down 1.3%. The Dow Jones industrial average gained 0.3% to record high 24585.43. Nasdaq composite index meanwhile rebounded 0.2% to 6875.8.
The Federal Reserve raised the federal funds rate by a quarter percentage point to 1.25% - 1.5% range. The dot plot of policy makers’ projections of future interest rates indicated three rate increases in 2018, as before. In economic news Inflation report showed the consumer price index climbed 0.4% in November, in line with expectations. Three-quarters of the gain were due to higher gas prices. However, core inflation rate which exclude volatile food and energy prices rose a smaller than expected 0.1%. The disappointment in core inflation weighed on the dollar.
ECB, Bank of England meet today
European markets pulled back on Wednesday led by Italian stocks. The euro and British Pound climbed against the dollar. The Stoxx Europe 600 closed 0.2% lower. Germany’s DAX 30 fell 0.4% settling at 13125.64. France’s CAC 40 dropped 0.5% and UK’s FTSE 100 slipped 0.1% to 7496.51. Indices opened lower today.
The European Central Bank, the Bank of England and the Swiss National Bank will issue policy decision today starting at 10:30 CET with the Swiss National Bank statement. No changes in interest rates are expected but updates on central bank’s inflation and economic growth outlooks may boost market volatility.
Australian dollar jumps on strong jobs data
Asian stock indices are mostly lower today. Nikkei fell 0.1% to 22726.76 as yen extended gains against the dollar. Chinese stocks are up as economic indicators suggested little change in economic growth in November and China’s central bank hiked short term interest rates five basis points : the Shanghai Composite Index is 0.5% higher while Hong Kong’s Hang Seng Index is 0.5% lower. Australia’s All Ordinaries Index slipped 0.1% as Australian dollar hit a five-week high against the greenback after better than expected jobs report.
Oil up on US crude stock draw
Oil futures prices are edging lower today after the US Energy Information Administration report of more than expected drop in domestic crude supplies of 5.1 million barrels. Prices ended lower yesterday on higher US gasoline stockpiles. February Brent crude fell 1.4% to $62.44 a barrel on Wednesday.
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