18/03/2025 Daily Reports
Federal Reserve Rate Decision (Wednesday)
- The Fed is expected to hold rates steady at 4.25%-4.50%, but markets are betting on three rate cuts this year due to recession fears.
- Trump’s aggressive trade tariffs are fueling economic uncertainty, leading to concerns over slower growth and higher inflation.
- The big question: Will the Fed stick to its cautious stance, or will the market push it toward easing sooner?
Bank of England Policy Meeting (Thursday)
- The BOE is likely to pause its rate-cutting cycle as inflation remains sticky despite slowing economic growth.
- Unlike the Fed, the BOE is in a tight spot: cutting rates too soon risks fueling inflation, while delaying cuts could weigh on the fragile UK economy.
- With European peers nearing the end of their rate-cut cycles, the BOE’s decision will be closely watched by GBP traders.
Bank of Japan Policy Decision (Wednesday)
- The BOJ is expected to keep rates at 0.5%, following its historic rate hike in January.
- Japan’s wage growth and inflation trends could determine the next move, but the central bank is likely to take a cautious approach.
- A surprise hawkish tone could send the JPY higher, while a dovish stance may weaken it further.
What’s Next?:
- This week could set the tone for Q2. If the Fed signals rate cuts sooner than expected, we could see a weaker USD, stronger equities, and higher gold prices.
- On the other hand, if Powell stays firm on higher-for-longer rates, expect risk-off sentiment to return.
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Wall Street Pauses After Gains as Fed Decision Looms
U.S. stock futures held steady on Tuesday after two days of gains, offering a brief break from the recent market slide. On Monday, the Dow rose 0.85%, the S&P 500 gained 0.64%, and the Nasdaq edged up 0.31%, with 10 of 11 S&P sectors finishing in the green, led by real estate, energy, and consumer staples.
Despite the rebound, the Nasdaq remains in correction territory—down over 11% from its recent high. Weaker-than-expected retail sales data for February, up just 0.2%, added to speculation that the Federal Reserve may consider rate cuts later in the year.
Treasury Secretary Bessent called the recent market pullback “healthy” but acknowledged lingering recession risks. Investors now await the Fed’s policy decision on Wednesday, with no change in interest rates expected.
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Gold Hits Record High: Middle East Tensions and Economic Concerns Drive Prices Up
– Gold surged past $3,028 an ounce, hitting a record high as Middle East tensions and US economic concerns bolstered its haven appeal.
– The rise came after Israel launched airstrikes on Hamas targets in Gaza, jeopardizing a fragile truce.
– Meanwhile, US retail sales data showed weaker-than-expected growth in February, adding to fears of an economic slowdown.
– Despite this, traders remain uncertain about Federal Reserve rate cuts.
– With growing economic uncertainty and financial stress, gold has gained 15% this year, prompting major banks to raise their price targets.
