iFund- Daily Market Commentary

2019-03-19 10:39
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30/1/2019

The Fed decided to keep the interest rates unchanged, and the policy statement excludes the wording of “further interest rate hikes” and implies that it will stay flexible on the balance sheet reduction issue. The Fed’s dovish signal boosted the US stocks price, while the US dollar fell to a four-month low. The size of the proposed debt issuance announced by the US Treasury has reached a new record.

  • The Dow Jones Industrial Average closed at 25,014.86 points, increased by 434.90 points or 1.77%. The Standard & Poor’s 500 Index closed at 2,681.05 points, increased by 41.05 points or 1.55%. The Nasdaq index closed at 7,183.08 points, increased by 154.79 points or 2.20%.
  • The Fed decided to keep the interest rates unchanged, and claimed that it will be patient for the future interest rate action. It also suggested that the contraction path of the balance sheet will be flexible, which is a significant dove shift compared to last month’s action.
  • Federal Reserve Chairman Powell said that political factors will not be considered in monetary decision-making. The shutdown of US government should have limited impact on the economy, and the economic growth rate in the second quarter will be recovered.
  • The UK’s FTSE 100 index closed at 6,941.63 points, increased by 107.70 points or 1.58%. The Frankfurt DAX index closed at 11,181.66 points, decreased by 37.17 points or 0.33%. The French CAC40 index closed at 4,974.76 points, increased by 46.58 points or 0.95%.
  • EU governments believe that it is more likely that Brexit process will be extended, but the EU will not discuss this before Prime Minister Theresa May propose it.
  • European Commission President Juncker reiterated that he will not renegotiate the Brexit agreement. The EU’s Brexit chief negotiator said that the EU-27 countries need to prepare for the UK’s non-agreement to leave the EU.
  • Japan’s Nikkei 225 index closed at 20,556.54 points, decreased by 108.10 points or 0.52%. The yen closed at 109.400 against the US dollar, increased by 0.027%.
  • Japan’s top foreign exchange official, Asakawa Asa, hinted that Japan would oppose the inclusion of monetary terms in any trade agreement with the United States.
  • The Shanghai Composite Index closed at 2,575.58 points, decreased by 18.68 points or 0.72%. The Shanghai and Shenzhen 300 Index closed at 3,168.48 points, decreased by 5.49 points or 0.80%. The RMB closed at 6.715 against 1 US dollar, increased by 0.302%.
  • On the occasion of Sino-US trade talks, the Standing Committee of the National People’s Congress completed the second trial of the Foreign Investment Law draft, which aims to protect the intellectual property rights of foreign investors and prohibit compulsory technology transfer.
  • The United States accused China of concealing government subsidies from the WTO. According to the questionnaire released by the WTO on Wednesday, the United States criticized that the China assessment on state subsidies were not comprehensive.

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