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Discover the latest insights shaping the global economy and financial markets in our weekly newsletter. This edition covers the Federal Reserve's rate-hiking pause, Amazon's potential use of Advanced Micro Devices' AI chips, Goldman Sachs' revised oil price forecast, and the European Central Bank's interest rate hike.
Don't miss out on the essential information — read the full recap now!
The Fed holds rates steady, pausing its rate-hiking campaign
The Federal Reserve announced on Wednesday that it would pause its rate-hiking campaign to assess the impact on the economy, but it indicated that there could be additional rate hikes later in the year. Since March 2022, the Fed has raised its benchmark interest rate 10 times consecutively to control the US economy and combat high inflation.
The Fed's statement after the meeting acknowledged the prudence of the pause but stated that most officials believe further rate increases will be necessary to bring inflation down to 2% over time. Fed Chair Jerome Powell indicated that there could be two more quarter-point hikes this year.
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AMD stock pops on potential Amazon super chip deal
Shares of AMD rose by over 2% in pre-market trading after reports emerged that Amazon's cloud division is considering utilizing AMD's new AI chips. This news has made AMD a trending stock.
The development follows AMD's recent unveiling of its high-powered MI300 AI chips, which are positioned as competitors to Nvidia's super chips.
Securing business from Amazon Web Services would be a significant achievement for AMD and could potentially lead to market share gains against Nvidia.
Trading involves significant risk of loss.
Goldman Sachs cuts oil price forecast by almost 10%
Goldman Sachs has reduced its oil price forecast by nearly 10%. The bank now predicts Brent Crude will be priced at $86 a barrel in December 2023, down from $95, while WTI crude is expected to fetch $81 a barrel, down from $89.
The increased supply from sanctioned countries is the main reason for the downward revision. Disappointing economic data from China has also contributed to a decline in oil prices.
Trading involves significant risk of loss.
ECB leads to a sharp decline in the Dollar Index to levels below 103.00
The European Central Bank (ECB) has raised interest rates by 25 basis points, causing the Euro to strengthen and approach 1.10 against the US Dollar. Consequently, the US Dollar Index has experienced a significant decline, falling below 103. The market will closely observe whether these trends continue in the upcoming sessions.
At the same time, the EUR/JPY pair has seen a substantial increase and has the potential to reach levels around 154/156, while the USD/JPY pair appears to have temporarily halted below 141.
Trading involves significant risk of loss.
This concludes our weekly recap. Have a great weekend and see you next week! 👋
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
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