Market Snapshot – Fed Rate Hike Probability Doubles

Fed Rate Hike Probability Continues to Lift US Dollar

European markets will have flicked through the news this morning to discover that one of the most dovish members of the FOMC, voting member Brainard, has decided to join the hawks, supporting a rate hike over the near-term.

Rate hike probability jumped to 66% on March, according to Fed Watch Tool, after fed members delivered hawkish comments.

The Dollar continues its strength versus major currencies. US Dollar index stands at 102.10, +0.33%. The dollar still short of 52-week high of 103.82.

Oil Falls for Third Consecutive Day on Record US inventory

Oil futures continue to drift lower on Thursday as investors react to a government report showing U.S. stockpiles at a record high. On Wednesday, the U.S. Energy Information Administration reported a 1.5 million barrel build. This was in line with the forecast, but it also drove inventories to a record 520.2 million barrels, while posting an eighth straight build.

Underpinning the market and holding it in a tight range is strict compliance with OPEC’s planned output cuts. According to Reuters, the cartel’s compliance level is up to 94 percent.

Helping to boost compliance to this level are bigger-than-expected cuts by Saudi Arabia and Angola since other members have reduced production less than they pledged. Russia, for example, has reduced production by only 100,000 barrels per day after pledging cuts up to 300,000.

Crude oil is trading at $54.05, -1.45%, Brent oil is trading at $55.61, down 1.33%.

Gold Falls on Dollar Pressure and Rising Rate Hike Bets

Gold futures are called lower shortly before the US session opening.  The market is trading inside yesterday’s range but with a downside bias. Helping to pressure the market this week has been rising U.S. Treasury yields and a firmer U.S. Dollar.

After another Hawkish comment by one of the most dovish members of the FOMC, voting member Brainard, gold price fell to trade at 1238.65, down 0.94%.

Global Stocks Hold Near Highest Levels on March Fed Rate Hike Bets

European stock markets are mixed as the Trump rally runs out of steam and investors start to turn cautious after pushing indices to lofty highs. Markets still moved higher in Asia with the ASX leading the way, but Hang Seng and CSI 300 closed in the red and while DAX and FTSE 100 managed to close above levels of 12000 and 7300 respectively Wednesday markets once again seem to need further impetus to extend further, especially as the Fed is eyeing a March rate hike and pressure on Draghi is also increasing as inflation jumps higher while confidence data improves.