- US markets open lower on Thursday
- Tech fails to rebound, US100 cracks through 15700 level
- US data supports hawkish Fed
US market had a volatile finish to the Wednesday session as the FOMC minutes revealed that a serious hawkish turn could be in play. Since investors have long assumed the Fed is always there to support markets, a hawkish turn could be very ugly for the markets. However, even after taking into account Wednesday reaction markets are still so close to all-time highs that it’s way to early to talk about panic. If anything there seems to be a kind of disbelief that the Fed is serious about all of this.
While US100 is fighting for its life on 15700 support and investors are trying to buy the dip there to save the trend, US500 is comfortable within the broad upwards channel
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Create account Try a demo Download mobile app Download mobile appThe data that has been released today will hardly help sentiment. Weekly claims remain near multi-decade lows supporting a view of strong labour market, massive trade deficit points at (too) strong demand and ISM services offers a double whammy of lower activity and yet higher prices. While the data package is not as relevant as the NFP (tomorrow) it still adds to the picture that reinforces views at the Fed.
Lower commodity prices in December helped drive ISM manufacturing prices paid down but this is not the case for services where price component remains close to records. Source: Macrobond, XTB Research
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