Fed Reigns in Stock Markets – For now
Federal Reserve Bank Meeting Minutes confirmed that the Fed is in a lot more cautious than market moves have suggested and US indices pulled back in trading although not significantly. The Dow closed the day down 0.18%, the S&P 0.20% and the Nasdaq off 0.59%. The dollar gained ground for the first time in a week but in a similar position to stock markets, it’s a minor retrace compared to recent moves, gaining just 0.14% back from a 2% loss in the last week. US Treasury yields didn’t buck the trend and ground lower again, the 2-year dropping 3 basis points and the benchmark 1-year losing 1.2 basis point, now trading at 4.410%. Gold was a big mover on the day trading back up to the $2,000 level.
Dollar Hits Pivotal Levels After Fed Minutes
The dollar has been on a downward trajectory for the last week as markets have started to aggressively price in the end of the Fed’s tightening cycle but last nights Fed Meeting Minutes have pointed to a more conservative FOMC. Currency traders will now look for some sort of confirmation either side of the debate and are now expecting to see more fluctuations in the majors. Data and Fed talk is distinctly lacking on the event calendar this week and there is a long wait until we have the Fed’s favoured inflation data – Core PCE Price Index – at the end of next week. It now remains to be seen if traders look more to the Fed and we see some dollar buying come back into the market or if they continue with the recent optimistic take on recent data prints and the dollar continues to fall, we do have some key levels approaching in most of the majors and these could prove pivotal in the next week or so.
Big US Data Day Ahead of Thanksgiving
With the major Thanksgiving Day holiday in the approaching, we have a plethora of data releases scheduled in the US session which could see some volatility into what is normally a long weekend for most US traders. The earlier trading sessions are relatively quiet in terms of risk events with a just speech from RBA Governor Michelle Bullock on the horizon along with the latest ECB Stability Review set for release. However, the US session see’s the latest unemployment claims numbers out alongside the Durable Goods data followed later in the day by the Revised University of Michigan Consumer Sentiment update.
