S&P500
The US market rose sharply after the Fed rate hike.On Wednesday, the US stock market was bullish. The Dow added 2.8%, the NASDAQ gained 3.2%, and the S&P500 was up by 3%.The S&P500 index is trading at 4,300 and is expected to be in the 4,260–4,360 range.The US market rose sharply after the Fed's decisions. The Fed raised the rate +0.5% yesterday, while promising to raise the rate +0.5% also at the next meeting to combat high inflation. It now stands at 8% per annum. In addition, the Fed will start to reduce its asset balance at a rate of around $90bn a month from June 1. In a rather short statement, the Fed pointed out that the US economy and the labour market are strong despite a slight contraction of GDP in Q1 and that high inflation remains the main risk to the economy.Reports yesterday showed new signs of slowing growth. The ISM service sector index fell to 57. Economists were expecting a reading of 58. April employment report from ADP showed a strong slowdown in job growth. In April the number of jobs stood at 247K. Jobs were expected to rise by 400K.Oil surges despite Fed rate hike. Brent is trading at $111 on Thursday.EU adopts 6th package of sanctions against the Kremlin. An embargo on the purchase of oil from Russia will be imposed. The ban will gradually come into force by the end of 2022. The reason for the ban is the conflict between Russia and Ukraine. The next package is being prepared against Russian gas. Authorities and citizens in the EU realise that these forced measures will lead to a significant increase in energy costs and, consequently, a possible drop in GDP. However, the majority considers it necessary to end the conflict. At the same time, the decline will be relatively small. Germany's economy will decline by a maximum of 3%, experts believe. Industrial orders in Germany fell by 4.7% in March.However, Fed chief Powell said yesterday that the Fed does not expect a recession in the US economy in 2022, and predicts growth. This means that the Fed could reconsider its hard line if this optimism fails to materialize at the end of the second quarter.USDX is trading at 102.80 and is expected to be in the 102.50–103.10 range. The dollar fell yesterday despite a Fed rate hike. Market players have probably already put all the upside potential into the previous strengthening. However, there will be another hike.USDCAD is trading at 1.2720 and is expected to be in the 1.2600–1.2800 range.Yesterday was the second day in a row of very heavy Russian rocket fire across Ukraine. Russian troops are trying to destroy transport facilities to block Western aid deliveries. According to the latest report from Mariupol from US intelligence, 12 battalion groups of Russian troops have moved north in support of the attack in the southern direction. Russian troop attacks and shelling have intensified sharply in recent days. There is an attempt to achieve maximum advance by May 9.
