US Markets Drop After 25bps from the Fed
US Stock markets dropped after the FOMC raised rates as expected by 25bps, the Dow closed down 0.78%, the S&P down 0.67% and the Nasdaq fell 0.46% in choppy trading conditions. US treasury yields and the dollar also took a hit as the Fed indicated that it could pause hikes at the next meeting. Oil prices continued to take a hit as demand continued to fall with both WTI and Brent dropping 4% on the day. Probably the biggest move came in Gold as it hit fresh all-time highs after news hit the market of further regional banking turmoil in the US.
Gold Flying High on Recession Fears
Gold hit new all-time highs in early trading today as recession fears gripped the market and the Fed delivered another 25bps. Safe haven buying on the back of more banking turmoil in the US and slowing growth pushed the commodity higher. Stop losses above the previous high proved too tempting to the thinner liquidity in the early Asian day and we saw the shiny metal hit a high at 2,072/oz. It has since dropped back under the $2,050 level but expects further volatility during the day as investors assess the latest plethora of fresh information to hit the market. Resistance will now sit at the days high with support coming in initially at the 2,020 level where the movement began.
ECB is Next Up for the Market
The market has a quiet data calendar Asian session to assess the impact of the latest Fed announcement and US banking issues before we have the next major central bank announcement. The European Central Bank is set to announce its latest rate move along with its statement and press conference later in the London session and expects further volatility around this event. We have the US weekly Unemployment claims data and Canadian Ivey PMI numbers out as well during the US session. Today’s combination of central bank announcements, data releases and news should have traders glued to their seats……. And let’s not forget to throw some earnings reports into the mix as well! Good Luck!
