Fed is close to ending its rate-hiking campaign | 21 Abril 2023

#SP500:

The Federal Reserve minutes from the March meeting were released last week. Fed members believe a downturn is imminent, following the collapse of Silicon Valley Bank and Signature Bank early last month. Several Fed officials questioned whether to pause rate hikes and watch to see what happens within the banking system. That being said, they agreed to another rate increase given price pressures, the strength of the recent economic data, and the Fed’s commitment to bring inflation down to the 2% longer-run goal. Consumer prices in March rose 0.1% from the previous month, the smallest monthly gain since December, fueling bets that the Fed is close to ending its rate-hiking campaign.

Trading recommendation: buy 4077 and take profit 4187.

XAUUSD:

U.S. consumer sentiment inched up in April, but households expected inflation to rise over the next 12 months. The survey's reading of one-year inflation expectations rose to 4.6% from 3.6% in March. Its five-year inflation outlook was unchanged at 2.9% for the fifth straight month and has stayed within the narrow 2.9-3.1% range for 20 of the last 21 months. This is a positive signal for precious metals. The Fed has hiked its policy rate by 475 basis points since last March from the near-zero level to the current 4.75%-5.00% range. Financial markets are betting on another 25-basis point increase at the Fed's May 2-3 policy meeting.

Trading recommendation: buy 1987 and take profit 2020.

#JPMorgan:

The largest American bank reported strong results in the first quarter, delivering net income of $12.6 billion. Basic lines of business saw continued momentum in the quarter. In Consumer & Community Banking, consumer spending remained healthy with combined debit and credit card sales up 10% and card loans up 21%. Asset & Wealth Management performed well with strong long-term inflows of $47 billion across products. The provision for credit losses was $2.3 billion, reflecting net charge-offs of $1.1 billion and a net reserve build of $1.1 billion.

Trading recommendation: buy 137.00 and take profit 141.25.