Some FOMC Members Favour Faster Rate Hikes

The minutes of the most recent FOMC meeting were released this morning and initially the market latched onto the information that some FOMC voting members favour a faster pace of rate hikes. This initially caused gold to drop although it quickly recovered those losses. The stock market barely reacted, and the Dow Jones closed at a new high of 24,922 which was a gain of 0.4% on the day.

Bitcoin has been steady so far this year and is currently sitting right around US$15,000 after reaching as high as US$19,000 last year. It was recently revealed that Peter Thiel, the first outside investor into Facebook, directed his fund to buy $15-20m worth of bitcoin last year which it still holds. The news of this holding did push the bitcoin price higher although that rally appears to have stalled.

Oil continued its rally overnight as the WTI oil price climbed 2.5% to $61.88 per barrel. This is the highest price since late 2014 when the price fell dramatically from the $100 per barrel levels that had persisted for the prior few years. The market is clearly getting more bullish on oil as inventory levels get closer to the five-year average. Geopolitical uncertainty in Iran, OPEC's third largest producer, is also helping to support the price as citizens are again protesting the government.       

Data Releases:

–    China Services PMI 12:45pm 

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This article was written by William O'Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.