Fed’s Pivot Party Continues in US Markets – Dow adds another 0.4%
US markets continued to move higher and stocks enjoyed another good day on the back of the dovish pivot from the Federal Reserve on Wednesday. Moves were nowhere near as strong as the immediate price action after the Fed, but stocks moved north again and yields and the dollar took another hit. The Dow added another 0.43%, the S&P 0.26% and the Nasdaq lagged rising 0.19% on the day. Treasury yields slid again to hit multi-month lows, the 10-year ducking under 4%, now trading at 3.92% and the 2-year hit levels not seen since May, now down at 4.28%. The dollar took a pounding again dropping 0.9% on the index with the Euro notably powering higher after the ECB’s latest rate update. Gold also moved higher in line with the weaker dollar and Oil at last gained a bit of traction, Brent up 3.16% on the day.
Euro Drives Higher on Central Bank Action
The Euro has had a shot in the arm over the last couple of days, gaining over 2% as first the Fed pivoted to a more dovish stance and then the ECB remained relatively hawkish. It was the ECB’s turn last night after a big Fed announcement the day before and they held rates steady as expected but pushed back on any hopes of potential rate cuts anytime soon. From an interest rate differential perspective this puts Euro bulls firmly in control over the next few weeks and with the single currency trading at recent highs a further push could see if moving in to fresh topside ranges in the new year. The November high just above 1.10 is the first target but a break through there opens that way for a challenge or the yearly high at 1.1273.
Another Big Data Day into the Weekend
Traders looking for a bit of respite today after what has been a big week in markets may be a little disappointed with tier 1 data releases set for all three trading sessions today. Investor focus will be on China in the Asian session with the latest release of Industrial Production data and Retail Sales numbers. The European session has the usual monthly plethora of Flash Manufacturing and Services PMI data all due out on the same day, French, German and UK numbers due out early in the day and we have the Empire State Manufacturing Index data due shortly after the US open followed later in the day by their Flash PMI numbers.
