The charts that matter: Fed becomes more hawkish

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:

• Monday Money Morning: US inflation is at a near-40-year high. So why are markets so calm?
• Tuesday Money Morning: In defence of fossil fuels
• Wednesday Money Morning: UK inflation hits a 30-year high – but will the Bank of England raise interest rates?
• Thursday Money Morning: The US central bank is winding down QE faster than planned – so why are markets bouncing?

• Friday Money Morning: The Bank of England clearly still doesn't believe inflation is here to stay
• Cryptocurrency roundup: Selling Tesla “merch” for dogecoin

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. 

(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. 

(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. 

(Ten-year US Treasury yield: three months)

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

(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. 

(Ten-year Bund yield: three months)

Copper prices rose from the previous week. 

(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.

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

Bitcoin fell as markets got wobbly after the Fed meeting. 

(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. 

(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)

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

(Amazon: three months)

(Tesla: three months)

Tesla was little changed from the previous week. 

Have a great weekend.