Equities Rebound as Oil and Bond Yields Ease

Equity markets are bouncing back this morning after Wednesday’s retreat following a more hawkish than expected Federal Reserve meeting. The US central bank raised the Fed Funds rate and signaled a potential second hike later this year. Easing energy prices and the Bank of England’s decision to hold rates steady are helping to shore up sentiment.

The Bank of England maintained its benchmark interest rate at 3.75%, with three of nine Monetary Policy Committee members voting for a hike. Both the decision and the voting split matched expectations.

NASDAQ futures are up 1.4%, while Dow futures have gained 1.0%. Overseas, Japan’s Nikkei rose 0.3%, while Hong Kong’s Hang Seng slipped 0.4%. European markets are advancing, with Germany’s DAX up 0.8% and the UK’s FTSE gaining 0.6%.

Crude Oil is down 2.7%, slipping below $100.00/bbl, while Brent Oil has fallen 3.6%, sliding below $102.50/bbl. Gasoline is down 2.3%, trading near $3.40/gallon. Metals are moving higher, with Gold up 0.4% towards $4,400/oz, Copper gaining 1.6% to reclaim $6.60/lb, and Silver advancing 1.5%.

US Treasury yields are easing, with the 10-year yield dipping below 5.00% and the 30-year yield falling towards 5.30%. The US Dollar Index is down 0.3%, while the Euro is up 0.2% and the Loonie is steady.

Attention turns next to the Bank of Japan, which is widely expected to raise its benchmark interest rate by 0.25 percentage points to 1.25% on Friday morning.

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