The US Federal Reserve expects GDP to increase from 5.8% to 6.6% in 2021, with the unemployment rate lowered from 4.7%-5.4% to 4.2%-4.7%, and annual core inflation revised to 2.2%-2.4%.
The Dow Jones Industrial Average (+0.58%) and S&P500 (+0.29%) closed at a record high on Wednesday as the Fed emphasized its tolerant stance against inflation. Asia stocks are set to gain after US equities and bonds rallied on rates projected to remain near-zero through 2023.
Yields overnight pulled back upon aggressive rate-hike projections. The US 2-year yields fell by 1 point to 0.137%. The longer-dated Treasuries also eased somewhat from their highest level in over one year.
On the forex trading side, the dollar gave up its strength against major currencies overnight. EURUSD rose from lows around $1.1887 to highs near $1.1987. AUDUSD rose from lows around $0.7699 to lows near $0.7811. Japanese yen (USDJPY) rose against the dollar from near 109.32 yen per dollar to near 108.71 yen per dollar.
In commodity trading, global oil was lower on Wednesday after four consecutive weeks of surging in US crude inventories. Brent oil fell 0.87% to $67.79 per barrel. WTI crude fell 0.32% to $64.59 per barrel.
Gold rose 0.92% from lows near $1723 to highs near $1750 an ounce. Iron ore fell slightly by 0.3% to $165.85 a tonne.
Bitcoin climbed from $56,000 to $58,000, following a weaker dollar.
Key events this week:
– UK Bank of England Official Bank Rate (Thursday)
– JPY Bank of Japan Monetary Policy Decision (Friday)
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