Increased expectations of higher US interest rates are pushing stock markets lower.
- Hawkish comments on rates from FOMC member Bostic have kept global stock markets weak. Despite making a golden cross a couple of weeks ago, the S&P 500 Index is now close to breaking below its 200-day moving average. If the breakdown is completed, this will suggest the nascent bull market is over according to traditional technical signals.
- The Fed’s hawkish expressions are also pushing up US Treasury Yields, with the 2-Year trading above 4.9% at a 15-year high and looking likely to rise higher still over coming days. This may bring an opportunity to trend traders who can access this asset, whether through a CFD or through the relevant micro future.
- In the Forex market, the US Dollar has regained strength and is rising again, while the New Zealand Dollar and the Japanese Yen currently the weakest major currencies. These represent medium-term trends. The US Dollar is in an interesting position as Dollar bulls have been held by the key resistance level in the Dollar Index at 104.925. If the price can close in New York beyond that level with a wide range and near its daily high, that will likely signify much more upside to come.
- Several commodities are performing very well, with a few continuing to rise after having recently made significant bullish breakouts, notably Sugar and Cocoa.
- Two members of the FOMC will be speaking later today, and their comments could move the Forex and stock markets. The Governor of the Reserve Bank of New Zealand will also be speaking.
- US ISM Manufacturing PMI data released yesterday came in approximately as expected.