Equities perk up as Powell tempered three-quarter point rate hike fears - 5.5.2022

The Dollar weakening has reversed currently. 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, fell 0.7% Wednesday while the Institute for Supply Management reported activity expansion in the US services sector slowed in April.

Both GBP/USD and EUR/USD accelerated their climbing Wednesday while Markit reported euro zone business activity accelerated in line with expectations in April. Both Pound and euro are down against the Dollar currently. USD/JPY accelerated its sliding and AUD/USD accelerated its climbing yesterday with both the Australian dollar and yen lower against the Greenback currently.

The US stock index futures are down currently ahead of Department of Labor report on Unemployment Claims due today at 14:30 CET. The three main US stock indexes booked gains ranging from 2.8% to 3.2% Wednesday after the Federal Reserve raised interest rates by 50 basis points but sounded a less hawkish tone than feared. Powell said policymakers were ready for similar-sized rate hikes at upcoming policy meetings in June and July, and announced the central bank will move to begin reducing its bond holdings from June 1.

European stock indexes are up currently after ending lower Wednesday led by retail shares as data showed euro zone retail sales fell in March. Asian stock indexes are up today with Japanese and Korean markets closed for public holidays.

Brent is extending gains currently. Prices jumped yesterday as the European Union announced plans to phase out imports of Russian oil. Prices rose despite the US Energy Information Administration report domestic crude stocks rose 1.2 million barrels last week. the Organization of Petroleum Exporting Countries and allied producers - OPEC+, is meeting today and is expected to stick to its plan for a gradual ramp-up of monthly production. The US oil benchmark West Texas Intermediate (WTI) futures added 5.3% and is higher currently. Brent crude gained 4.9% to $110.14 a barrel on Wednesday.