Daily Markets Broadcast 2018-11-29

Daily Markets Broadcast

2018-11-29

Wall Street soars after Powell’s speech

In a speech yesterday, Fed Chairman Jerome Powell hinted that rates could be “just below” what is perceived as a neutral level. The market interpreted this as meaning fewer rate hikes next year, and equities surged while the US dollar fell as a result.

US30USD Daily Chart

Source: OANDA fxTrade

  • The US30 index rallied to its highest level in nine days after Powell’s speech, adding the most in one day since October 16
  • The index is rising toward the convergence of the 55- and 100-day moving averages in the 25,594-25,605 area
  • US personal income is expected to rise 0.4% m/m in October after a 0.2% gain in September. Spending is seen unchanged at +0.4% m/m. Spending needs to pick up to give any boost to the economy.

DE30EUR Daily Chart

Source: OANDA fxTrade

  • The Germany30 index edged higher in yesterday’s trading as investors bid up equities amid hopes for a dovish Powell speech. Sure enough, they got one, so the index should rise again today
  • The 55-day moving average is at 11,697 and has capped prices on a closing basis since August 29
  • Consumer prices in Germany are expected to rise at a slower pace of 2.4% y/y in November, data today should show. Slower price increases could help the ECB maintain rates lower for longer and help stocks.

XAU/USD Daily Chart

Source: OANDA fxTrade

  • Gold advanced for the first time in four days yesterday as the US dollar fell after Powell’s speech
  • The commodity bounced off the 100-day moving average at 1,212 for a second straight day. Recall the 55-day moving average crossed above the 100-day moving average on Monday, a medium-term bullish indicator. Trendline resistance may be found near 1,227
  • The release of minutes of the last FOMC meeting early tomorrow Singapore time could disclose whether tapering of rate hikes was discussed. We may get a glimpse of what the Fed thinks the rate horizon will look like in 2019.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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