European update – Powell has the markets’ back

Fed steps up

It would appear investors had nothing to be nervous about ahead of the Fed meeting on Wednesday, as the central bank stepped up and delivered the dovish message they so craved.

Source – Thomson Reuters Eikon

Recent gains across US markets on Wednesday are filtering around the globe as the continuing trend of dovish central banks distracts investors from the reality of an economic slowdown, trade war between the world’s two largest economies and Brexit. Now that investors feel that the Fed has their back, it’s over to Trump and Xi to deliver the news they truly desire.

All differences won’t be resolved during their prolonged meeting next week but if tariffs can be avoided and a deal put back on the table in the coming weeks or months, investors will be very relieved which could be supportive for equity markets heading into the summer period.

The old saying “sell in May and go away” was looking good a few weeks ago but a strong rebound in June and prospect of progress next week could rubbish that idea for another year.

Economic Calendar

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

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.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam