Dovish Fed announcement helps markets conclude recovering from rough year start

Solid backwind from Wednesday’s dovish Fed rate announcement helped stocks see continue recovering. The leading S&P500 index increased 1.35%, completing its 5th consecutive weekly gain, and totaling over a 13% gain from February’s lows. Rising to a level of 2,049.56 points, also marks exceeding, by about 0.3%, the index’s level at the start of the year. Equity’s sail into safer waters was also evident at the CBOE VIX index, which went from hovering around 17 points at the start of the week to just 14, which is its lowest since December.

Fed’s commentary also worked fairly well to depreciate the greenback, with EUR/USD adding close to 1.5% on the rate announcement itself, or a total of 1% during the week as a whole. Reaching a peak of 1.1342 marked the weakest for the U.S. currency vs. the Euro since February 11th. Seeing the JPY as a safer haven as western central banks execute more accommodative policy has helped the Japanese currency strengthen by about 2% vs. the Dollar, while hitting a level of 110.67, the strongest for the JPY vs. the USD since October of 2014.

The impact from the Dovish measures introduced by the European Central Bank on the March 10th rate announcement, meanwhile, seemed to diminish. The Spanish IBEX35 Index lost 0.4% during the week, and the CAC 40 lost an even heftier 0.7%. The German DAX, alternatively, continued to show strength, as it increased 1.2% during the week.

Stocks, duly noted, aren’t the only type of asset to gain from continued expectations for monetary accommodation. Gold prices surged about 2.7% as the Fed announced the no hike. After some declines at the start of the week, however, gold only managed to gain 0.5%. All is not negative for commodities; however, as oil prices secured a 2.2% weekly gain amid expectations for production cuts. Reaching a peak of USD 41.2 a barrel also marked the highest for the black gold since early December.