The charts that matter: Fed becomes more hawkish

Gold rose meanwhile the US dollar fell after a key Fed meeting. Here’s what else happened to the charts that matter most to the global economy.

Welcome back. 

On the cover of this week’s magazine, what new listing rules in London mean for your money. UK regulators hope that weaker listing rules will attract more tech listings and rejuvenate a declining stockmarket. Perhaps they should pay more attention to other growth sectors, reports Simon Wilson. 

If you’re not already a subscriber, sign up here and get your first six issues free

This week’s podcast features Steen Jakobsen of Saxo Bank about his annual “outrageous predictions” – and how reality is proving a match for anything he can come up with. Find out what he says here.

Here are the links for this week’s editions of Money Morning and other web articles you may have missed:

Now for the charts of the week. 

Gold rose as the US dollar retreated after the US central bank, the Fed, announced it is ending its Covid-19 bond purchases by March. 

Stockcharts.com

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) fell from a three-week high this week after the Fed said it is targetting three rate hikes in 2022 and is looking to end its bond buying by March. 

Stockcharts.com

(DXY: three months)

The yield on the ten-year US government bond edged higher after the Fed confirmed it is tightening monetary policy. Yields move inversely to bond prices. 

Stockcharts.com

(Ten-year US Treasury yield: three months)

But the yield on the Japanese ten-year bond fell.

Stockcharts.com

(Ten-year Japanese government bond yield: three months)

And the yield on the ten-year German Bund rose, in line with higher US yields as US data showed on Tuesday that US prices rose more than expected in November, suggesting that inflation may be high for some time to come. 

Stockcharts.com

(Ten-year Bund yield: three months)

Copper prices rose from the previous week. 

​ Stockcharts.com

(Copper: nine months)

And the closely-related Aussie dollar rose after strong jobs data made it more likely the central bank will also taper its pandemic-era bond buying in early 2022, following the Fed.

Stockcharts.com

(Aussie dollar vs US dollar exchange rate: three months)

Bitcoin fell as markets got wobbly after the Fed meeting. 

Stockcharts.com

(Bitcoin: three months)

US weekly initial jobless claims rose by 18,000 to 206,000. The four-week moving average was 203,750, a decrease of 16,000 from the previous week's revised average. 

© Federal Reserve Bank of St. Louis

(US initial jobless claims, four-week moving average: since Jan 2021)

Brent rose as falling stockpiles and as upbeat predictions from the Fed offset Omicron fears. 

(Brent crude oil: three months)

Stockcharts.com

Amazon fell, as the Fed's decision caused big tech shares to tumble on Friday. 

(Amazon: three months)

Stockcharts.com

(Tesla: three months)

Stockcharts.com

Tesla was little changed from the previous week. 

Have a great weekend.

Recommended

Are recession fears justified? Maybe it’s time to look on the bright side
Economy

Are recession fears justified? Maybe it’s time to look on the bright side

There's a lot to feel nervous about right now, and many people are worrying about an impending recession. But it's by no means certain, says John Step…
28 Jan 2022
No easy answers to Europe’s gas crisis
Energy

No easy answers to Europe’s gas crisis

Europe’s gas crisis is a long way from over, with some analysts thinking that gas prices could remain twice as high as normal until 2025.
28 Jan 2022
The Federal Reserve has turned inflation-fighter – how do you invest now?
US Economy

The Federal Reserve has turned inflation-fighter – how do you invest now?

The US Federal Reserve has become much more hawkish on inflation and less concerned with the markets' reaction to rising interest rates. John Stepek e…
27 Jan 2022
How to invest in energy and metals as tech stocks crash
Commodities

How to invest in energy and metals as tech stocks crash

It’s been a terrible week for stockmarkets. But not everything is crashing – “real” assets such as metals and energy are holding up well and should ha…
26 Jan 2022

Most Popular

Amazon halts plans to ban UK Visa credit card payments
Personal finance

Amazon halts plans to ban UK Visa credit card payments

Amazon has said that it is to shelve its proposed ban on UK customers making payments with Visa credit cards.
17 Jan 2022
Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022