The Market Digest the US Fed Rate Hike Amid Japan-US Trade Talks on Tap

The Market digest the Fed rate hike.

In consensus with the market expectations, the FOMC raised the interest rates from 2.00% to 2.25% and in the press release 30 minutes later hinted at moving away from its ACCOMMODATIVE POLICY. Meaning the Fed have left the door ajar to raise rates in the near future as they may deem fit.

The USD undoubtedly was volatile during the releases, however, settled higher vs its rivals and supported by today’s Macroeconomics data release from the US which includes, GDP, and initial jobless claims reports to name a few.

Global Stocks: Asian shares reclined as the China-US trade talks get drowned and the USD firms, weighing on the EU shares.

  • Germany30Had lost 0.47% by the time of print 08:33GMT to 12,324.60 and spinning down from 12,344.83-12,272.59.
  • France40 Was seen 0.20% down trotting at 5,501.90 in a range between 5,485.83 – 5,510.16.
  • Italy 40dropped nearly 1.66% to 21,250 pressed down by the delay with the Italian budget, which caused bank stocks to free fall. The Stock was trading between 21,157.50 -21,470.00.
  • UK100was amongst the few odd ones out. Hold on to minute gains in between 7,489.14 – 7,523.75.

Commodities:

WTI crude: In conjunction with Wednesday’s post-WTI crude performed as expected. Dipping due to the US Home Sales report, and slipping further by the built in the Crude Oil inventories of nearly 1.8 million barrels and then subsequently by the Fed rate hike.  Crude oil prices are sensitive to ongoing implementations of US-led sanctions on Iran to range between 71.97 – 72.56 up 0.98% at 72.27 with possible upside movement.

Gold With the USD supported. Most investors shunned the safer havens, GOLD, CHF, and JPY to name a few putting Gold price on a temporal dovish to a sideways path between 1,198.30 – 1,202.50. Market participants ponder on the timing to go, long most likely around the Diwali holiday celebrations.

  • Currencies 
    EUR/USD  lost it attraction as market participants digest the impact of the US rate hike. The pair were seen 0.28% down between 1.1685 – 1.1757 and standing at 1.1709.
  • GBP/USD meanwhile is plagued by domestic microeconomics and uncertainties surrounding the ongoing Brexit diplomacy.

Meanwhile, the US and Japan prepare for trade talks.

Cryptocurrencies: As Market Participants weigh the possible effects on the stance of the FED and the US-China trade impasse some Investors are attempting to take a small profit on the cryptocurrencies.

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It’s the Final Countdown To The US Rate Decision With Crude & Gasoline Inventories Report

The final countdown to today’s Fed rate decision and USD remains subdued. Largely because about 98.04% of market participants have already priced in the uptrends of the USD.

Hence the expectation is for the FOMC to hike by 0.25% to 2.25%. Should the FOMC decide otherwise, we could see a short yet steep reversal in trends.

However, if they do then the focus will be on the statements of Chairman Jerome Powell’s in is press release some 30 minutes after the release of the decision.  The keyword sort after in the adherence or exclusion from “ACCOMMODATIVE” policy.

 Global Stocks: Global stocks remain strained. Tuesday wall street fell, as China-US trade talks sour. While some of the top Tech companies testify in before Congress today namely AMAZON, GOOGLE, APPLE, and CHARTER-Communications. Meanwhile, Asian shares were bolstered by Chinese Insurance, Technology Hardware & Equipment, as well as the Banking sectors, help push stocks in the limelight. China also announces a stimulus package to provide enough liquidity for small to medium-sized companies. The EU shares displayed mixed signals ahead of the fed rate decision, by the time of print 08:41 GMT,

  • Germany30 Sails the tide with lows and highs ranging from 12,337.62 – 12,402.22 the automakers weighs on uptrends as US-China talks hit a snag
  • France40  Was mostly bullish rallying 0.14% to 5,486.87 and trading between 5,471.57 – 5,490.88
  • Italy 40 Shed 0.09% 21,570.00 and range in a range bound from 21,615.00 – 21,505.00
  • UK100 Was ranging in a  sideways trajectory from  7,490.25 – 7,513.25 at 7,507.31 jumping in and out of gains.

Commodities:

  • WTI crude: Despite US President Trumps’ punches at OPEC at the UN on Tuesday WTI Crude oil prices were not frazzled. Ranging between 71.84 – 72.38 ahead of today’s Crude Oil and Gasoline inventories report. Which could be impacted by economic data release from the US on Home Sales and the rate decision.
  • Gold prices remained downtrodden some analysts had expected to see the Gold prices rise as a contingency should the feds fail to hike rates however as of the time of print the Gold spot was bearish down 0.13 % swinging between  1,203.20 – 1,206.90.
  • Currencies
    EUR/USD  is capricious sensitive both to ECB’s Tapering plans and the Fed’s intentions coupled with activities in the Euro Area. The pair were seen between 1.1757 – 1.1776 down 0.02%
  • GBP/USD was caught ranging from 1.3191-1.3152 and bearish in its outlook as concerns of the Brexit is elevated.

Cryptocurrencies: It could be argued that the crypto arena is slightly positive as most of the tokens reversed loses.

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Fed Interest Rate Decision on Tap With US- China Trade Talks off the Table

Relying on various Fed Rate Monitor tools to access the likelihood of another Fed Rate hike on due Wednesday it is noteworthy to acknowledge that nearly 100% of market participants have already bought in the hawkish trends of the USD.  With the expectation of a rise from 2.00% to 2.25% a 25basis point boost. The shook would appear to be if the FOMC is to hold pat for any unforeseen reason. The Caveat is to expect either an upside or downside knee-jerk upon the announcement of the decision.

On Friday China canceled its scheduled meeting with the US to iron out the spat on tariffs. Apparently citing that China will not negotiate with a “knife at its throat”. Thus by Monday, the full arsenal of the 10% on $200 billion worth of Chinese goods was implemented with China retaliating on $60 billion of US goods.

Global Stocks: are wobbly, The Chinese shares contracted while the Japanese rose slightly.

Elsewhere in Europe, EU Shares were modestly bullish, helped by an upbeat German Wholesale Price Index, (WPI) report a leading indicator of inflation of prices. However, the upside is seen in check as the Trade War tiffs between the economies is on the rocks again.

  • Germany30  trades between 12,321.65 – 12,381.82 at 12,373.31 by 07:27 GMT and expected to remain range bound for the rest of the day.
  • France40  ranges between 5,468.91 – 5,492.70 analysts suggest resistance may be capped for the day.
  • Italy 40 rose 0.99% to oscillate 21,382.50 – 21,565.50 gains are believed to be in check henceforth.
  • UK100 runs amok between 7,455.25 – 7,485.25 as UK Minster Starmer voices out their concerns with the Brexit agreement or the worst case scenario leaving the EU with no agreements plagues investors sentiment.

Commodities:

  • WTI crude: prices rose to 4-year highs, amid production limitations and ahead of today’s API report. By 07:27 GMT WTI Oil stood $72.34 up 0.06% ranging between $72.03-$72.41. Further upside has not been ruled out yet.
  • Gold Prices are still dismal to the downside in a range from (1,201.30 – 1,205.00) as the USD continues to firm ahead of Wednesday rate decision. Investors are on risk on mode shunning the safe havens for the time being.

FX Market:
Nearly $3 .8 trillion in daily exchange is seen in this market however lately volatility is not always triggered according to familiar patterns. With Traders anticipating another Fed hike the USD seems to be in an oversold territory however technical indicators give the impression that they are in the comfort zone. Other major should have been bearish to the USD, the EUR, for example, is seen climbing vs the USD/

EUR/USD was at 1.175.4 at the time of print 07:27 GMT ranging from 1.1724 – 1.181.5 up 0.06%

GBP/USD Was under pressure as opposed to PM Theresa May’s Brexit plans faces more scrutiny. The par was seen at 1.3100. Set on a course ranging from 1.3095-1.3125. Any comment from Gertjan Vlieghe a member of the UK’s Monetary Policy committee will be used as a prelude to guiding the short-term trend of the GBP.

Cryptocurrencies: Following a short uptrend for the Crypto arena last week, this week began on the left foot for most of the Crypto as investors seek to capitalize on the upcoming Fed rate

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Green Day For Global Markets, A Sigh of Relief!

What a sigh of relief for The Markets as investors folk to take advantage of the positive fundamentals ahead of the weekend, coupled with profit taking. The green spectrums seen across all boards and even the red on China’s boards are a positive sign, railing on hopes for more stimulus. With that said, caution is still warranted as correlations and inverse- correlation between assets classes do not seem to be sustainable.

Global Stocks: Global shares are bullish Asian shares are up as are the EU shares. Investors deliberated on the long-term effects of the ongoing trade tiffs between China and the US as with one eye on NAFTA and Brexit. By the time of print 08:30GMT

  • Germany30  rallied 0.92% to 12,435.10 in a range from 12,382.60 – 12,460.34.
  • France40 was trending from  5,463.66 – 5,497.52 up 0.76% at 5,492.68
  • Italy 40 climbed 1.02% to 21,611.50 and  oscillating between 21,496.50 – 21,651.50.
  • UK100 was seen up 0.89% from 7,401.68 – 7,436.58 and jumpy around 7,432.75.

While the tech industry lead by Apple.inc push wall street up

Commodities: As oil prices maintain a hawkish view, US President Trump fired at OPEC to bring prices down. Investors are keeping a close watch on for the OPEC’s World Oil Outlook to be launched in Algiers on 23 September 2018. meanwhile, OPEC Secretary General Mohammad Barkindo, reveals in his interview with Bloomberg on continued co-operation between OPEC and Non-OPEC partners to have the stability to address growing demand.

  • WTI crude: was seen bullish oscillating between 70.14 – 70.86 up 0.65% after crossing the $71bbl threshold.
  • Gold prices picked up to trade from 1,211.40 – 1,215.80.

FX Market:  All Major except for the JPY seem to hold hawkish undertones, however, it would not be a surprise to see corrections downwards as fundamentals begin to fray.

  • EUR/USD  extended gains crossing the 1.18 psychological mark to trade between 1.1669 – 1.1803. up 0.06% at 1.1784 Reports from the EU’s PMI, French PMI, German PMI, may contain uptrends.
  • GBP/USD climbed to trade between 1.3207 – 1.3276 although at the time of print it was hawkish, it remains at the mercy of upcoming reports on Public Sector Net Borrowing and BoE’s Quarterly Bulletin.
  • AUD/USD  lies at the mercy of reports from the US should they been seen as strong the AUD may recede from previous gains currently spotted in a range from 0.7281 – 0.7304.

Meanwhile, the USD continues to triumph over emerging markets like MXN and the TRY. USD/TRY was up 0.97%  found between 6.1950 – 6.2863 while USD/MXN modestly up 0.12% locked between. 18.8270 – 18.8832.

Interestingly the crypto arena has also been doing fairly well occasionally jumping in and out of gains. BTC/USD was seen up 4.62% swinging from 6,340.0 – 6,745.0

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Markets Embrace Tariff Announcement With Oil Climbing

Markets embrace the announcement of tariffs with oil climbing, uncertainties surrounding the US-China tariffs spats which have been plaguing market sentiments for months was announced late Monday, however by Tuesday the market had still not deciphered the implication.

The US demands 10% on $200 billion worth of Chinese goods exempting some Tech companies like Apple from the saga. China also retaliated hitting back with $60 billion on US goods. The restriction goes into effect on 24th September 2018 leaving just enough wiggle room for a recourse should any of the two world economies decide to change their minds.

Global Stocks:  With the market taking the decision as manageable Global stocks ticked up, with Asian shares taking the lead followed by the EU and likely to reflect positively on Wall Street.

  • Italy 40 rallied 0.16% at 21,313.50 ranging between 21,142.50 – 21,335.00 by the time of print 07:44 GMT with further upside in view
  • UK100 was up 0.20% at 7,345.75 trending from  7,323.25 – 7,353.34 with a hawkish outlook
  • Germany30  Climbs 0.25% set in a range from 12,202.64 – 12,301.97 with more upwind in the pipelines.
  •  France40  was trailing upwards by the time of print up 0.24% set between lows and highs ranging from 5,398.20 -5,407.00 Technical analysis suggests second resistance levels around 5,415 and if that were to be breached 5,428 or above.

Commodities: Although commodities are up except for Gold corrections downwards are in view. As the USD is expected to strengthen due to today’s financial reports

  • WTI crude: US Crude Oil inventories dropped -2.057 million, its lowest in the past 3.5-years. With global demand rising, WTI oil rose 0.59% to trade between 70.81 – 71.34 at 71.19 by 07:44 GM. The OPEC meeting set for today may offset prices in either direction.
  • While the Gold spot prices were left marooned between 1,205.90 – 1,211.40.

FX Market:  Despite the USD strength, the 6 major’s currencies are staging a defiant comeback

  • EUR/USD was initially spotted at 1.1687 0.12% up ranging between 1.1669 – 1.1690 with ECB’s Praet set to be speaking this morning the EUR may have more room to climb depending on how investors conceive the tapering plans for the EUR.
  • GBP/USD  Gained modestly  0.11% at 1.3158 market participants remain Lukewarm on the GBP should Core Retail Sales beat market expectation the GBP may climb some more and if not plummet with a day range from 1.3135 – 1.3195 at the time of print.
  • AUD/USD  Swing from 0.7255 – 0.7276 and bullish

The USD fell to the ZAR and MXN however bullish to the TRY. Basically, currencies from Emerging Markets are still stretched and not out of the woods.

Despite the fact that Japan reports of some $60 million stolen in crypto-currencies out of the 2289 tokens 89% were bullish.

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US-China Tariff tiffs continue To Plague, OPEC Meeting on Tap

US-China tariff tiffs continue to plague the market. Almost like a deja- vu from Monday. The financial calendar details events which may add a tinge of volatility away from the grappling trade fears, which may cause abrupt swing for the USD vs other majors.

Global Stocks: 

Once again Asians shares we left standing in the rain as conflicting reports on when US Trump may impose a certain percentage on 200billon worth of Chinese goods. Market participants are mindful of an impending woe thus restricting their trading activities as well. In Early European trading hours, EU shares were also down. Ahead of ECB’s President Mario Draghi’s speech. However, there are bullish undertones which remain to be explored cautiously.

  • Germany30 has enough wiggle room to surge to 12,185.55-12,078.18 up 0.53% or recedes down 0.23% approx.
  • France40  was the early among bird to shrug of trade fears trading up 0.29% at the time of print 08:15 GMT.at 5,378.08 and set to be ranging between 5,348.49 – 5,389.76.
  • UK100 has not fared well down 0.18% from 7,304.75- 7,287.75 with further downside in view possible back the current support levels of 7,286.23 before any corrections are realized.
  • Italy 40 Crossed the 21k threshold trading at 21.138.50 up 0.25% and ranging between 21,058.50 – 21,223.50.

Commodities: Remained pressured down as the tariffs rhetoric continues.

  • WTI crude oil Prices plummeted 0.33% by 07:30 GMT to 68.47 ranging from 68.64-68.29 ahead of Tuesday’s API report and OPEC Meeting after which it may rally back close to the $70.
  • Gold prices also hit the rocks ranging from1,200.30 – 1,206.80.

FX Market: Is mixed with not much logic except driven by sentimental response to Trumpononics. Although the USD has been broadly high for the past 3 months’ other majors such as the EUR, AUD, and for a while the GBP rally against the USD.

  • EUR/USD Ranges in between 1.1667 – 1.1718
  • GBP/USD  Swings to from 1.3070 – 1.3170
  • AUD/USD  Oscillates between 0.7145 – 0.7221

However, the USD remains king over (EMFX) Currencies from Emerging Markets such as the TRY, MXN, and ZAR to name a few.

Meanwhile, some the cryptocurrencies fall into another selloff spiral 98% of the 2279 tokens were in red.

Well Tech shares bath in blood TESLA begins to struggle with delivery as the fire outbreak in one of its production plants.

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