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Markets were fully pricing a 75 basis point Fed rate hike for the next day, with some probability of a 100 basis point move. The dollar had gained between 2.1% and 4.7% against G10 currencies over the past week as equities entered a bear market.
A larger expected Fed hike reinforces dollar strength and risk-off sentiment, which typically weighs on dollar-denominated commodity prices. Investors are pricing a tighter monetary backdrop.
think.ing.comFrancesco Pesole, Chris Turner, Frantisek TaborskyJun 14, 2022After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Markets fully priced a 75bp Fed hike with some chance of 100bp, and the dollar gained 2.1-4.7% against G10 currencies in a week as equities entered a bear market.
