Wall Street drops as Fed pushes back on rate cut hopes
The Fed held rates unchanged, as expected, but crimped market expectations that low inflation would promote a rate cut rather than hike, saying inflation is expected to pick up naturally in the future. Chinese and Japanese markets are closed for the rest of the week.
US30USD Daily Chart
The US30 index fell the most in almost six weeks yesterday after the Fed’s comments on inflation
Rising 55-day moving average support is at 26,026. A drop through 26,264 would bring a possible double-top formation into consideration
US factory orders are expected to rebound in March, rising 1.5% m/m in March following a 0.5% drop in February.
DE30EUR Daily Chart
The Germany30 index has snapped a four-day winning streak in early trading this morning in response to the Fed decision yesterday. So far, the index has dropped the most since April 9. Markets were closed yesterday for the May Day holiday
The 55-day moving average crossed above the 200-day moving average on Tuesday and is now at 11,710
German retail sales are seen falling 0.4% m/m in March after a 0.9% increase in February.
UK100GBP Daily Chart
The UK100 index posted the biggest one-day loss since March 22 yesterday following the Fed meeting. Reports suggest that PM May and opposition leader Corbyn may be closer to reaching a compromise, which could pave the way for a Brexit deal.
The 55-day moving average is at 7,290. The index has traded above this average since January 30
The Bank of England holds its rate meeting today, but is widely expected to leave both rates and its asset purchase unchanged. The Bank seems to be on hold until Brexit is sorted out.
