General:
For the second consecutive meeting, the Federal Reserve held interest rates steady today and preserved a path to cutting rates this year. Fed officials voted 11-1 to hold the benchmark federal-funds rate in a range between 3.5% and 3.75%. Twelve of the nineteen meeting participants penciled in at least one cut this year, the same as in December.
The Fed’s post-meeting statement acknowledged uncertainty from the war in the Middle East as higher energy prices from the Iran war threaten to prolong their yearslong inflation fight.
Energy:
Israel struck Iran’s South Pars gas field, the largest such facility in the world, prompting immediate threats of retaliation from Iran. The Iran government’s Islamic Revolutionary Guard Corps stated that it considered refineries and other energy infrastructure across Saudi Arabia, the United Arab Emirates and Qatar to be “legitimate and prime targets.” Gulf oil officials said evacuations have already started for the sites on the list, as well as for other energy facilities in the region.
Oil:
Oil prices jumped on the news with Brent Crude oil on the ICE Exchange trading within pennies of $110/barrel intraday. West Texas Intermediate crude oil futures traded on CME Group’s NYMEX Exchange reached $99.41/barrel overnight last night (basis the April contract) as is poised to close at its second highest price level since the start of the Middle East conflict.
Heads up (reiterating from last week):
Keep in mind that day trading margins can change at your clearing firm / FCM – for certain markets, entire asset classes, i.e., energies, precious metals, stock indexes, etc., particular gateways, i.e., Rithmic, CQG, Sierra/Teton. They can also vary during overnight hours and prior to certain events, i.e., important economic report releases, scheduled statements by important people, agencies, etc. Contact your Cannon Trading Co. broker for specifics. |
