A look around Markets in a scary post-FOMC morning – Market Outlook

Yesterday's FOMC meeting marked the beginning of a rough session for Traders around the globe.

Global Stocks Indexes took large hits, correcting down 3% in Japan, London and Europe and gapping down starkly in this morning's open.

As you can see on the Index chart for the Dow Jones Industrial Index, heavy selling pressure from a massive hawkish repricing has applied large pressure on US Equities and others around the world.

Yesterday's conference from Jerome Powell did not help to contain the initial scare of higher rates for longer – as a matter of fact, his wordings around the current 3.50%-3.75% were estimated to be located "at the plausible range of Neutral [rates]", implying that further movement in the Fed Policy would only be contingent on a weakening economy or Labor Market.

And we haven't seen any sign of this for now – Quite the contrary: Jobless Claims came at 205K, the lowest since January (and they were at two year lows at that time)

This also combines with a flurry of Central Bank Decisions (including the ECB, Bank of England, Bank of Japan and the Swiss National Bank) which haven't communicated any type of dovishness.

When assuming that Crude Oil prices are now 40% higher than they were the last trading day of February, and close to 90% higher since their January lows, it is difficult not to reprice some heavy form of inflation spike.

Everybody feels it at the pump, it hasn't been fun.

Read More:

• Bank of England leaves interest rates unchanged as war and rising energy prices complicate inflation fight
• Markets Today: European Gas futures soar 25%, Brent hits $119/barrel. Central bank pressure heats up as ECB meeting looms
• FOMC pauses rates yet again, Dollar explodes – Economic Projections and (Updated) Market Reactions

European and Asian Markets are getting even more concerned by the latest escalation in Energy infrastructure attacks across the Middle East, as these regions remain heavily affected by supply disruptions in the Strait of Hormuz.

A detailed Crude Oil analysis will be coming at the top of the hour.

Bond traders are now largely undoing the steepening that was priced in the Rate curve (implying that rates will be lower in the near term than the long-term).

The issue with this is that such Curve conditions tighten credit and largely hurts banks.

This is also the type of Curve movement that can precede either rate hikes or recessions – two conditions that aren't the most favorable for Stock Markets or any other Markets as a matter of fact.

In general, a flatter yield curve means that current inflation is expected to be higher than long-term inflation – This comes with the heavy rises in WTI.

Markets may at least reconcile with the fact that the US Dollar is now correcting back to its pre-FOMC levels – This happens at the top of its July 2025 Range (from 96.00 to the current 100.00).

An in-depth US Dollar analysis will be coming up this afternoon, but the general theme to keep in mind is the fact that an easing dollar may also ease general pressures around Markets since the beginning of the War.

Watch the 4H 50-MA that has however just acted as support – Bouncing here would reinforce the pre-open panic.

This pullback has helped the JPY to relief, and similarly for other currencies – The USD is now at the bottom of the FX board in today's session. The correction in WTI is also helping.

The price action in Gold and other metals has been very ugly, as participants really price out the Global Rate cuts, giving relative strength to yielding assets.

This phenomenon is magnified by the lack of consistent rallies since the beginning of the War and a general scare of a long-term inflationary process.

Still, it's not the end of the World for metals until $4,400 breaks – Here could be a decent, small DCA entry point for those who did not participate in the trend.

Below $4,400 however may see further correction back to $4,000 and below, $3,500 so make sure to watch for your size and add only on confirmation!

Bitcoin is now back below $70,000; Ethereum remains relatively strong at $2,100 but the overall Market is getting hurt by the latest hawkish repricing.

Keep a close eye on headlines and flows throughout the day as today is promised to be quite volatile.

Safe Trades!

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