Last week, the minutes pointed to an extremely cautious Federal Reserve (Fed) even before later economic data showed a sharp slowdown in hiring by US companies. Most investors however, thought the Fed’s first-rate hike in a decade should still come this year.
Overall, the Federal Open Market Committee (FOMC) still see risks to the downside for US real Gross Domestic Product (GDP) and inflation forecasts, with recent global growth and financial market developments worsening these downside risks.
The commodity since the beginning of the year fell more than 2.5% and is in a recovery since the beginning of October, trading above the 10 and 50-week moving averages. Last week gold rose with a narrow range and closed in the green near the high of the week. Stochastic is showing a strong bullish momentum and crossed above the 50 mid line.
Expecting an upward move to a key level at 1,227.12 on a break above a weekly resistance at 1,177.76 (scenario 1) or a bounce from a weekly resistance at 1,177.76 could push downward gold to a weekly resistance at 1,131.65 (scenario 2).
Nearly all the indicators that Chair (Janet) Yellen and other FOMC participants have recently cited as important in assessing labor market conditions showed some degree of deterioration. Markets are now likely to downgrade any likelihood of a policy move in 2015.
The Federal Reserve (Fed) minutes may shed further light onto the most recent rate decision, which was interpreted as dovish by the market, however the fact that Fed’s Yellen held a press conference immediately after the decision limits the amount of new information that the minutes may provide.
The UsaTec rallied more than 2.5% since the start of the month and rose 1.1% year to date; the Index is in a bearish phase since the end of September after the death cross. Last week the Index initially fell but found enough buying pressure to turn around and closed at the high of the week on above average volume. The stochastic is showing bearish momentum and is below the 50 mid line.
Expecting an upward move to a weekly resistance at 4,347.50 on a break above previous week high at 4,261.25 (scenario 1) or a break below a weekly resistance at 4,247.50 may push the Index back down to a weekly support at 4,118.25 (scenario 2).
UsaTec is a CFD written over Nasdaq 100 futures.
The Labor Department’s September report showed stalling job growth in the past two months, stagnating wages, and the participation rate falling to a 38-year low, dealing a blow to market hopes for the central bank’s Federal Open Market Committee (FOMC) to lift rates in October.
Rate hike expectations have collapsed with Fed funds futures now pricing in only 30% chance of tightening before the end of the year compared to a 45% chance before the report.
This week sees a number of central bank related news, with Reserve Bank of Australia (RBA), Bank of Japan (BoJ) and Bank of England (BoE) rate decisions as well as Fed minutes. While there are market expectations that the BoJ could expand QQE this week, with analysts suggesting if the BoJ analysts hold off, it may well only be for a few weeks.
Since the beginning of the year the USDJPY fell 0.5% and is in a bearish phase since the beginning of October. The pair initially fell last week but found enough support to grind some of the losses although closed in the red near the open of the week. The stochastic is showing a light bullish momentum but is still below the 50 mid line.
Expecting a downward move to a key level at 115.85 on a break below previous week low at 118.68 (scenario 1) or a bounce from a weekly support at 121.84 could throw the pair down to a key level at 115.85 (scenario 2).
The US Federal Reserve (Fed) yet again postponed a hike in interest rates from near zero levels even after weeks of enthusiastic speculation about whether it was about time for the central bank to announce a rate hike.
This time around the developments in China, the world’s second largest economy, appeared to have influenced the decision in favour of maintaining a status-quo on low interest rates. The central bank has two more scheduled policy meetings this year, in late October and mid-December. Most analysts now expect a rate rise to come in December at the earliest.
The updated FOMC forecasts revealed that the Fed expects Gross Domestic Product (GDP) growth for 2015 to be 2.1%, up from the 1.9% it estimated in June. However, it lowered its 2016 forecasts to 2.3% from 2.5%. The unemployment rate forecasts for 2015 and 2016 were lowered by 0.3% each to 5% and 4.8%, respectively.
The S&P500 fell more than 0.5% since the start of the month and plunged more than 4.5% year to date settling in a bearish phase. The Index went back and forward without any clear direction with a wide range during the course of last week and closed in the red near the open of the week. The stochastic is showing bearish momentum and is below the 50 mid line.
Expecting downward move to a weekly support at 1,891.50 on a break below previous week low at 1,891.50 (scenario 1) or a bounce off the weekly resistance at 1,973.0 (scenario 2).
Usa500 is a CFD written over S&P 500 futures.
Yesterday the US dollar rose after the release of the latest FOMC Minutes, as they were perceived slightly less dovish and a June rate hike is still possible. A stronger dollar makes commodities denominated in US dollars expensive for holders of other currencies, typically decreasing demand for such raw materials.
The U.S Energy Information Administration (EIA) yesterday, released its latest survey. The report was expected to show a decrease in crude oil stocks with estimates at 3.429 million barrels but the actual was worse than expected rising to 10.949 million barrels.
Yesterday crude oil price fell more than 4.0% on an average volume and close near the low of the day but still managing to stay above the 10 and 50-day moving averages. The commodity is in a recovery phase and the stochastic is showing a overbought market.
Expecting upward move to a daily resistance at 53.92 on a bounce from a daily key level at 49.54 (scenario 1) or a break below a daily key level at 49.54 can push the commodity down to year lows at 46.08 (scenario 2).
LCrude is a CFD written over Light Crude futures.
Usa500 had a rough end last week, with a drop as traders reacted to Friday’s disappointing nonfarm payrolls figure. Specifically, the 126K US jobs added in March that fell well below analysts’ predictions of around 245K.
US equities couldn’t maintain Monday’s momentum with fears over an impending interest rate hike in the US with a strong dollar hurting American businesses and could ultimately lead to a slowdown in US economic growth.
The Usa500 since the start of April rose 0.49% and is in a potential phase change, from a warning phase to a bullish phase, trading below the 50-day moving average. Yesterday, the Usa500 initially rose but found enough resistance at 2078.50 to turn around and close in the red near the low of the day. Stochastic is showing a slight bullish momentum and below the mid line.
Expecting an upward move to a daily resistance at 2,106.25 on a break above a daily resistance at 2,088.50 (scenario 1) or a break below the 10-day moving average can push the Index down to a daily support at 2,035.25 (scenario 2).
Usa500 is a CFD written over S&P500 futures.
Crude prices initially fell after domestic inventories hit record highs for a 10th week, however the market seemed to be holding out from making new lows on bets the US central bank may hint at a sooner-than-later rate hike.
Back in November, a major catalyst for the major breakdown in oil prices was OPEC’s decision not to cut oil production, a decision that has also led to oversupply of the market. Now Crude oil is moving toward the OPEC last meeting target price of $40 per barrel.
Yesterday the U.S Energy Information Administration (EIA) released its latest survey. The report was expected to show a decrease in crude oil stocks with estimates at 4.000 million barrels but the actual was worse than expected rising to 9.622 million barrels.
Crude oil price initially fell but found enough buying pressure at Tuesdays low to turn things back around and close near the high of the day. The commodity is in a bearish phase and made a bullish engulfing pattern. The stochastic is showing an oversold market but even with the commodity well into oversold territory, we should expect a pullback before another downward leg.
Expecting upward move to a daily key level at 47.92 on a break above the daily resistance at 46.08 (scenario 1).
LCrude is a CFD written over Light Crude futures.