The FP Markets research team produce First Light News during the early hours of the European session, ensuring traders and investors have the news needed to begin their day.

Good morning.

The US equity space ended on the front foot on Tuesday, gaining across the board. The Dow Jones Industrial Average rose 316 points (+0.98%) to 32,560, the S&P 500 gained 51 points (+1.30%) to 4,002, and the Nasdaq 100 was up 178 points (+1.42%) to 12,741. Outperformance was seen across energy stocks, rallying 3.5%, closely tracked by consumer discretionary and financials at 2.8% and 2.5%, respectively. Regarding US rates, treasuries bear flattened—short-term interest rates rose faster than long-term interest rates—amid a lack of haven demand; notably, the benchmark 10-year US Treasury yield recently rebounded from a six-month low, underpinned technically by its key 50-week moving average at 3.397%.

(StockCharts)

Shares of First Republic Bank (FRC) surged by nearly 30.0% in response to news that major banks, including JPMorgan Chase, were considering a potential investment in the company. Meanwhile, Tesla (TSLA) saw its share price climb 7.8% after the rating agency Moody’s upgraded its credit rating to a non-junk ‘Baa3’ rating.

Meta Platforms (META) also posted modest gains of 2.2% following their upgrade to ‘overweight’ at Morgan Stanley. To cap it off, Alphabet (GOOGL), Amazon.com (AMZN), Nvidia (NVDA) and Apple (AAPL) all witnessed their share prices rise between 1.1% and 3.7%, while Foot Locker (FL) surged 7.0% following a ‘buy’ rating at Citi.

Markets Today

In early hours in Europe this morning, the Office for National Statistics (ONS) announced that inflation in the UK jumped 10.4% in the twelve months to February, consequently snapping a three-month fall. This dismal release will likely seal the deal for at least a 25 basis-point increase at tomorrow’s BoE (Bank of England) meeting.

Nevertheless, attention is all on the US FOMC (Federal Open Market Committee) today; according to STIR markets, a near-90% probability is priced in for another 25 basis-point increase. Alongside the FOMC statement, we’ll also get a chance to look at the latest FOMC Economic Projections, or the so-called ‘Dot Plot’.

In markets this morning, overnight trading saw strong performance across Asia Pac equity indexes, with Australia’s ASX 200 chalking up its second consecutive day in the green. In contrast, European equity indices are mixed in opening trade. Out of the FX space, the US Dollar Index is eking out modest losses and navigating ground south of its 50-day simple moving average at 103.44, while procyclical currencies (AUD and NZD) benefit.

Headline Events for the Day Ahead:

US Federal Reserve (FOMC) Economic Projections at 6:00 pm GMT.

US Federal Reserve (FOMC) Rate Decision at 6:00 pm GMT (Expected 5.00%; Previous: 4.75%).

US Federal Reserve (FOMC) Press Conference at 6:30 pm GMT.

Technical Take This Morning?

Those who read this week’s Weekly Market Insight may recall that our research team communicated the possibility of further USD weakness. Ahead of today’s FOMC meeting, recent trading has seen the daily timeframe cross under its 50-day simple moving average at 103.44 and perhaps open the door to daily demand coming in at 100.27-100.77. Notably, this has witnessed the EUR/USD make its way above its 200-day simple moving average at $1.0728.

(Trading View)

Major Currency Markets as of 9:10 am GMT:

(Trading View)

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