The benchmark U.S. 10-year Treasury yields hovered close to multi-year highs

US stock markets: Stock indexes fell yesterday and the U.S dollar surged to a nearly two-year peak after the Federal Reserve released minutes from its last meeting that reinforced views the central bank may tighten aggressively to curb inflation. 

The benchmark U.S 10-year Treasury yield rose, but was off its session high after the minutes, while oil prices fell sharply on the day. Trading was choppy on Wall Street following the minutes, with stocks briefly paring losses and then extending them. The NASDAQ ended down more than 2%, leading to declines among the major indexes. 

The Fed is determined to rein in inflation, and we just hope and pray that there will be a soft landing of the economy and not a hard landing that sends us into a recession. According to minutes of the March 15-16 policy meeting, Fed officials "generally agreed" to cut up to $95 billion a month from the central bank's asset holdings as another tool in the fight against surging inflation, even as the war in Ukraine tempered the first U.S. interest rate increase.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average lost 0.42%. The best performers of the session on the Dow Jones Industrial Average were UnitedHealth Group Incorporated, which rose 2.70% or 13.99 points to trade at 531.75 at the close. Meanwhile, Johnson & Johnson added 2.60% or 4.62 points to end at 182.23 and Walmart Inc. was up 2.32% or 3.52 points to 154.99 in late trade. The worst performers of the session were Salesforce.com Inc., which fell 4.44% or 9.32 points to trade at 200.82 at the close. Microsoft Corporation declined 3.66% or 11.38 points to end at 299.50 and Visa Inc. Class A was down 3.13% or 7.08 points to 219.01.

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NASDAQ 100

The NASDAQ index fell 2.22%. The top performers on the NASDAQ Composite were Advent Technologies Holdings Inc. which rose 79.70% to 3.63, Moxian Inc. which was up 39.76% to settle at 2.32 and Mobiquity Technologies Inc. which gained 29.63% to close at 2.10. The worst performers were Guardforce AI Co Ltd which was down 32.54% to 1.14 in late trade, GWG Holdings Inc. which lost 25.14% to settle at 2.62 and Integrated Media Technology Ltd which was down 21.44% to 20.52 at the close.

Oil price - Crude Oil market, Brent Oil market

Oil futures fell sharply yesterday after large consuming nations said they would release oil from reserves to counter tightening supply and hawkish minutes from the U.S central bank that bolstered the dollar. Selling accelerated into the close, leaving both the Brent and West Texas Intermediate benchmarks at their lowest closing levels since March 16. 

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U.S crude fell $5.73, or 5.6%, to $96.23 a barrel. Member states of the International Energy Agency (IEA) will release 120 million barrels from strategic reserves to try to quell price gains. The release will include 60 million from the United States, according to two sources familiar with the matter. That commitment forms part of the previous U.S announcement of a 180 million-barrel reserve release. This is the second time the IEA has released reserves this year and effectively boosts worldwide supply by roughly 2 million barrels a day for at least the next two months as the world tries to overcome the potential loss of Russian oil.

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Precious and Base Metals - Gold price, Silver price, Palladium price

Gold was flat in range-bound trade today, as the uncertainty over the Ukraine conflict offset pressure from the firmer dollar and yields following the U.S. Federal Reserve’s aggressive stance to combat inflation. Spot gold was flat $1,925.61 per ounce. U.S gold futures was up 0.3% to $1,927.90. With the correlation between gold and Treasury yields breaking, the war and high inflation take precedence over the Treasury bills. And that’s the reason why we’ve seen gold prices actually holding well, but also not going up because of the pressure of high-interest rates. 

The benchmark U.S. 10-year Treasury yields hovered close to multi-year highs hit in the previous session, increasing the opportunity cost of holding non-yielding bullion. Many Fed officials said they were prepared to raise rates in half-percentage-point increments in coming policy meetings to tame inflation, according to the minutes released yesterday. 

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The dollar hovered near a two-year high against a basket of currencies after Fed minutes showed the central bank is preparing to move aggressively to head off inflation. A stronger dollar makes gold less attractive for other currency holders. However, an escalation in geopolitical tensions between Russia and Ukraine, and people waiting for the Western countries to impose fresh sanctions on Russia - all these are supporting gold. 

Ukraine wants sanctions that are economically destructive enough for Russia to end its war after accusing some countries of still prioritizing money over punishment for civilian killings that the West condemns as war crimes. Spot silver fell 0.5% to $24.32 per ounce, platinum shed 0.5% to $948.34 and palladium rose 1.4% to $2,228.01.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Grains futures rose in early Asian trading today ahead of a weekly export sales report from the U.S Department of Agriculture, while traders kept a close watch on the Ukraine crisis that has disrupted global supplies. Ahead of the USDA report, analysts expected the government to report U.S. corn sales in the week ended March 31 at 575,000 tonnes to 1.4 million tonnes, soybean sales at 600,000 tonnes to 1.550 million tonnes and wheat sales at 100,000 to 750,000 tonnes. Weather forecasts showed little rain for the coming two weeks.

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