Fed Speeches Eyed After Shaky Start in Europe

It’s been a shaky start to the European session on Thursday, despite the data from the UK and the euro area in the morning being broadly positive.

Further declines in oil were  also weighing on equity markets earlier with oil and gas companies among the worst performers and dragging on indices. Both WTI and Brent crude do appear to be topping out following what has been an impressive rally over the last month and a half. A move below $37.70 in WTI and $38.30 in Brent could signal further losses ahead.

It’s also worth remembering that this is the final trading day of the quarter which can affect trading and may be partially behind the broad-based declines in equity markets. Not to mention that indices in Europe are trading near the highest levels this year which may be prompting some profit taking. The FTSE and DAX, for example, are both trading around levels that have provided repeated resistance throughout March, which could be contributing to today’s losses.

On top of all this, we’re also headed into the business end of the week, with U.S. jobs report being released tomorrow as well as some data and speeches from Fed officials later today. The jobs report can often prompt some risk aversion in the lead up to the release because of the significance of the data, although it will be interesting to see how markets respond tomorrow given that Janet Yellen’s quite dovish comments on Tuesday, which cast doubt on whether we’ll see another rate hike before the latter part of the year.

Today though we’ve got weekly jobless claims to come from the U.S. as well as more comments from Fed officials, with William Dudley and Charles Evans both due to speak. Given the contradictory nature of the comments from Fed officials lately, I doubt either will manage to provide much additional clarity on the expected course of action for the Fed in the coming months, although it will be interesting to see how each sees the current situation.

For a look at all of today’s economic events, check out our economic calendar.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.