Open: London Session | Forex, Metals, Oil, Agriculture March 23, 2023



Those reserves have since dwindled, exports have weakened, and plantings of major winter crops like wheat declined.


The greenback fell against all of its peers, with a decline of as much as 1.3% against the euro in the first hours after the decision. Hedge funds may have turned dollar bulls at just the wrong time.

United States

Powell acknowledged that banking problems tighten credit conditions and help the Fed fight inflation but it s still not clear how big or durable the effect will be. The market still thinks the Fed will cut rates several times this year, and the Fed still disagrees. Until there is some clarity on this, the banks health will matter more than the tight labor market, inflation expectations, or the Fed s monetary reaction function. The bank problems would probably do some of the Fed s work for it by tightening conditions, he conceded, and yet depositors should assume that their money was safe.
The Fed s not stopping with rate hikes, BOE s rate decision and another Hindenburg report is coming. Coming Up European shares are set for losses as investors digest comments from the US Treasury and messaging from the Fed following its rate hike. Only days ago, the banking turmoil led traders to question whether the Fed should hike at all. Sonia Meskin, head of US macro at BNY Mellon, put it simply: The tension between market pricing and the Fed appears to be an enduring 2023 theme.
The one clear takeaway is that the Fed’s stance pivoted dovish relative to its peers, particularly the European Central Bank. We expect the Fed s data-dependent framework to be informed by what happens in both the economy and banking sector.


Lagarde will meet EU leaders in Brussels tomorrow, when they re expected to discuss the banking crisis. EU leaders meet in Brussels for two-day summit. Fico s return threatens to throw EU unity further into turmoil with a public figure who has shown tendencies akin to Hungarian Prime Minister Viktor Orban.