Home Forex Markets The Fed officially entered the interest rate hike cycle, but the impact on commodity trends was limited, and copper prices remained strong and fluctuated

The Fed officially entered the interest rate hike cycle, but the impact on commodity trends was limited, and copper prices remained strong and fluctuated

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美联储正式进入加息周期,但对商品走势影响有限,铜价维持强势震荡


Affected by the sudden situation in Russia and Ukraine, the Fed acted cautiously and announced a 25 basis point rate hike at its March meeting, officially entering the rate hike cycle. The trend of commodities is mostly affected by geopolitical risks, the impact of the central bank’s tightening is limited, and copper prices remain at a high level, waiting for further guidance.

The Fed announced a rate hike of 25 basis points, which was in line with market expectations. The dot plot shows that the voting committees support the pace of interest rate hikes. It is expected that interest rates may be raised 6-7 times during the year, which means that interest rates will be raised at every subsequent meeting. Powell said at a press conference that the situation in Russia and Ukraine may bring uncertainty, he is hopeful that inflation will peak this year, and he is full of confidence in the recovery of the job market.

The Federal Reserve officially kicked off the interest rate hike cycle, which has a major impact on global capital flows, and funds are returning to the United States at an accelerated rate. The meeting looked hawkish, but in fact it was mild-mannered. This was mainly caused by the chain reaction triggered by the situation in Russia and Ukraine. No one was sure how the international situation would develop next. For the sake of stability, the Fed chose to raise interest rates by 25 basis points, leaving room for future changes in the situation. If it announces a 50 basis point interest rate hike, the market will change dramatically.

The Fed raising interest rates is a major event, but it has a limited impact on commodity prices. As far as oil prices are concerned, will the supply gap vacated by Russia be made up by reducing liquidity? Obviously not. Oil prices are the bellwether of commodity trends. Today, commodity buying is booming. As long as the central bank does not coordinate and tighten significantly, commodity prices are still in a super cycle.

Copper prices themselves still lack favorable guidance, and the trend is led by oil prices. As the climax of oil prices passed, copper prices also rose and fell, but the situation remained strong, accumulating strength for the next round of upward movement. 5% of the trades determine 75% of the profits, constructing high-quality trading decisions is worth studying!

It can be seen from the above picture that the price of fine copper continues to run above the 2.00 trend line in 2021, indicating that the trend is still in a bullish trend. Judging from the finishing situation above 4.00, Meijing Copper still maintains a high range of 4.00-5.00, and the trend within the range is upward. It is advisable to continue to use 4.50 as a reference support to pay attention to the shock rise of 4.50-5.00.

(Arthur)

Follow me on Twitter @ArthurZ22426704

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