Global markets took a bit of a breather yesterday as they digested the Fed’s latest update on interest rates. The major US indices had a much quieter day with both the Dow and S&P finishing the session near to flat and the Nasdaq adding 0.4% by the close. Currencies traded in relatively tight ranges and treasury yields held firm. Fed Chair Jay Powell reconfirmed the FOMC’s position on interest rates on his second day of testimony to the Senate Banking committee and US data once again came in strongly. A 50 bps rate hike from the Fed is now priced in at 80% by the market. North of the border, The Bank Of Canada kept rates at 4.5% as expected and became the first major central bank to suspend its monetary tightening campaign.
All eyes in the market are now firmly on Friday’s Non-Farm Payrolls data in the US and last night’s jobs numbers from the ADP and Jolts are both indicating that we could see another strong print. Some of the major currencies and commodities are now sitting at crucial technical levels and this will provide traders with good opportunities if they remain there into the key data. Notably, Cable has found support around the 1.1800 level and Gold above 1,800, if we get a surprise either side of the expected 224k number then we will see significant moves across the market.
Looking ahead at today’s trading sessions and it’s another relatively quiet day in terms of economic data releases and central bank action. Chinese CPI data is due out in the Asian session and is widely expected to come in near the predicted 1.9% level and it’s really only third tier data up until the weekly unemployment claims numbers in the US later in the day.
