Wall Street firmer as Fed cuts rates again
US indices saw wide swings after the Fed cut rates but remained non-committal about further cuts. Indices pared losses into the close to finish higher. Fed Chairman Powell said the cut was intended to preserve economic expansion in the wake of rising external headwinds. The Fed has once again become data dependent with “deeper” cuts ready if needed.
US30USD Daily Chart
The US30 index touched one week lows post-Fed but recovered to post a second consecutive day of gains
The 55-day moving average has edged up to 26,610, with prices trading above it since September 5
There were three dissenters for the rate cut. One wanted a 50 bps cut while the other two wanted to keep rates unchanged. FOMC members’ dot plots, where they plot their individual views on interest rate direction, did not go below 1.50%. US President Trump immediately tweeted that the Fed had no “guts” , no sense, no vision.
DE30EUR Daily Chart
The Germany30 index snapped a two-day losing streak yesterday, buoyed by the rebound on Wall Street and below-forecast Euro-zone inflation data
The 100-day moving average is at 12,115 and has supported prices since September 6. The 55-day moving average is just below at 12,080
Euro-zone consumer prices rose 0.1% in August, slower than the +0.2% that analysts had been expecting. The Euro-zone’s current account surplus is seen widening to €26.2b in July from €23.1b. Speeches from ECB’s Coeure and Lautenschlager are scheduled.
HK33HKD Daily Chart
The HongKong33 index fell for a third consecutive session yesterday ahead of the Fed rate decision. In the US, legislation is moving through the House and Senate that would put Hong Kong’s special trading status with the US under scrutiny
The index failed to overcome resistance at the 100-day moving average of 25,486 last week. That moving average has capped prices since July 25
The HKMA cut its benchmark rate by 25 bps in response to the Fed move. Consumer price data for August are due to be released tomorrow, and are expected to show a slower pace of increase of +2.5% from +3.3% in July.
