Markets Rally on Thursday, FOMC Minutes Not Hawkish Enough
07 July 2022
It looks like we could be heading for a relief rally in most risk assets, as oversold conditions might prompt some profit-taking heading into the light summer trading season.
Central bank minutes
The Federal Reserve's June meeting minutes, which were made public on Wednesday, underscored the bank's steadfast commitment to bringing prices under control, which is why the meeting resulted in a 0.75 percentage point rate rise.
Participants believed that in the policy meeting later this month, an increase of 50 or 75 basis points would probably be reasonable, according to the minutes.
Later on Thursday, the European Central Bank will also release the minutes of its most recent meeting, at which the decision was made that a rate increase of 25 basis points in July would be appropriate.
With 32 new coronavirus cases reported in the city, Shanghai is poised to enter another lockdown due to the virus. In addition, officials in Tokyo were reportedly intending to tighten restrictions, according to Japanese news agencies.
Nevertheless, sentiment in the market remained optimistic, judging by the rising EURUSD pair, along with US and EU equity indices.