Wednesday marks a pivotal day for global markets, with the spotlight on the US Federal Reserve’s (FOMC) interest rate decision. Investors will be closely monitoring the Fed’s announcement for indications on future monetary policy, which could drive significant market volatility.
KEY INDICATORS
US Federal Reserve (FOMC) meeting – Rate decision
The most anticipated event of the day is the Federal Reserve’s interest rate decision, scheduled for the afternoon.
Investors are divided over whether the Fed will hike rates again or pause after a long series of rate increases aimed at curbing inflation.
The accompanying statement and Fed Chair Jerome Powell’s press conference will be critical in providing clues about the central bank’s future actions and economic outlook.
A hawkish tone could lead to volatility in equities, bonds, and currencies.
Crude oil prices
Energy markets will continue to be a focus as oil prices remain elevated due to OPEC+ production cuts and geopolitical tensions.
Further gains in oil prices could stoke inflation concerns and heighten market sensitivity to the Fed’s actions.
MARKET MOVERS
EUR/USD
Potential short positioning Short positions below 1.11190 with targets at 1.11121 & 1.10968 in extension. Alternative scenario Above 1.11441 look for further upside with 1.11564 & 1.11659 as targets. As long as the resistance at 1.11441 is not surpassed, the risk of the break below 1.11190 remains high.
Nasdaq100
Potential upside preference Long positions above 19537.54 with targets at 19587.36 & 19643.82 in extension. Alternative scenario Below 19408.02 look for further downside with 19334.96 & 19243.63 as targets. Futures tread water as investors brace for Fed rate cut.
Crude Oil (WTI)
Potential short preference Short positions below 68.56 with targets at 67.96 & 67.64 in extension. Alternative scenario Above 69.55 look for further upside with 69.93 & 70.56 as targets. The break above the resistance at 69.55 would trigger an upward acceleration to 70.56.
TODAY’S NEWS HEADLINES
Dollar catches footing ahead of Fed
The dollar steadied on Wednesday as stronger-than-expected US retail sales had traders slightly trimming bets that the US easing cycle will begin with an outsized interest rate cut.
The dollar has fallen along with US yields since July and at USD 1.1119 per euro is not far from the year’s low at USD 1.1201 as traders anticipate easing at a clip, with more than 100 basis points of rate cuts priced in by Christmas.
August retail sales rose 0.1% in the US, data showed overnight, against expectations for a 0.2% contraction.
The Australian dollar traded firmly at USD 0.6759 early on Wednesday.
The New Zealand dollar ticked 0.1% higher, with help from higher milk prices, to USD 0.6194.
Oil prices steady, with investors focusing on Fed decision
Oil prices steadied on Wednesday, after rising in the previous two sessions, as investors await the US Federal Reserve’s anticipated interest rate cut.
Brent crude futures for November dropped 3 cents to USD 73.67 a barrel at 12:53 PM GMT.
US crude futures for October slid 11 cents, or 0.2%, to USD 71.08 a barrel.
Prices were also supported by the potential for more violence in the Middle East that may cause possible output disruptions.
Gold flat as investors focus on Fed
Gold prices were flat on Wednesday as investors weighed chances of an outsized interest rate cut by the Federal Reserve later in the day.
Spot gold was little changed at USD 2,571.28 per ounce, as of 2:24 AM GMT.
US gold futures rose 0.2% to USD 2,597.60.
Spot silver fell nearly 1% to USD 30.42 per ounce.
