Stocks Move Lower
The stock markets have been trading in a cautious manner over the last few days as the Fed has been more hawkish than what many would have expected it to be. The focus over the last 24 hours has been on the FOMC meeting minutes that were released yesterday. After some initial confusion over how it needed to be interpreted, the traders realised that the Fed meant business and that it could be possibly even 4 rate hikes during the course of the year depending on how the incoming data from the US pans out. This kind of hawkish language was not something that was expected at this stage from the Fed and this has led the dollar higher and put the pressure on the stock markets. The increase in interest rates could make taking loans a costly affair in the US and hence this is likely to affect the stock markets in the medium term. This is one of the reasons why the stocks are under pressure and the traders are trading carefully with the next bearish leg just around the corner.
Cryptos Hit by Losses
In the crypto world, we are seeing some all round losses with the BTC moving below the $10,000 region after scything through the strong support at the $10,400 region which had been holding up the prices till yesterday. The ETH prices have also dropped below the $800 region as of this writing and it can be said that these losses can be seen all around the markets. There have been no specific reasons that can be attributed to the drop but as the markets begin to mature, we have to try and see how the different markets and instruments operate in co-relation with each other in the short and medium term. The last couple of days has seen some solid strength in the dollar and the prospect of quick rate hikes in the US and this could be affecting the demand of the cryptocurrencies. The traders need to wait and see if there is a pattern emerging out of this.
Global Equities Struggle after Fed Report, Wall Street Reverses Lower
Global equities have sold off this morning. The Nikkei Index declined by more than a percent, and the Hang Seng fell nearly 1 and a half percent. European equities have also produced selling. French Consumer Price Index statistics were lackluster with a result of minus 0.1%. And a German Business Climate reading missed its estimate. Wall Street was positive most of Wednesday, but upon investors digesting the Federal Reserve’s Meeting Minutes the three major indexes experienced strong momentum downwards. Wall Street is expected to open with further headwinds per indicators coming from the Futures Markets.
U.S Dollar Reacts in Strong Fashion, Disappointing U.K Business Sentiment
Forex has provided pure fireworks the past day. The U.S Dollar became stronger late last night as investors began to react to the renewed prospects of a few interest rate hikes in the States. The Pound and Euro have been trading relatively calmly the past couple of hours, but remain below yesterday’s higher values. Second Estimate GDP results came from the U.K this morning and were slightly below expectations. And a Business Investment survey, also from Britain proved disappointing. The Yen has been slightly stronger as risk adverse trading dominated Asian equity markets today.
Near-Term Appears Vulnerable to Gold, Steady Decline and Headwinds
A strong reversal took place for Gold late on Wednesday. After initially gaining upon the Federal Reserve’s report, the precious metal began a steady decline and headwinds have continued. Gold is near 1321.00 U.S Dollars an ounce and looks vulnerable for the near term.
Canadian Retail Sales Statistics, Weekly Unemployment Numbers from the U.S
Crude Oil Inventories data will come from the U.S at 16:00 GMT and could provide insights for commodity traders.
- 13:30 PM GMT Canada, Core Retail Sales
- 13:30 PM GMT U.S, Unemployment Claims
- 16:00 PM GMT U.S, Crude Oil Inventories