Daily summary: Indices drop, USD gives back part of post-FOMC gains

6:53 PM 21 September 2023
  • Post-FOMC risk aversion continue to pressure risk asset, like equities. Declines could be spotted on stock markets all around the world today
  • Wall Street indices are trading lower - S&P 500 and Russell 2000 drop 0.9%, Nasdaq trades 1% lower and Dow Jones declines 0.4%
  • European stock market indices traded lower today - German DAX dropped 1.3%, UK FTSE 100 moved 0.7% lower, French CAC40 slumped 1.6% and Dutch AEX was 0.9% down
  • GBP deepened declines after the Bank of England unexpectedly kept interest rates unchanged at 5.25%. Market expected a 25 bp rate hike. 5 out of 9 MPC members supported such a move, including BoE Governor Bailey
  • CHF dropped after Swiss National Bank kept rates unchanged at 1.75%. Market was expecting a 25 basis point rate hike to 2.00%
  • Central Bank of Republic of Turkey (CBRT) delivered a 500 basis point rate hike, pushing the one-week repo rate from 25.00 to 30.00%
  • Riksbank delivered a 25 basis point rate hike, putting the main rate at 4.00% - the highest level since late-2008. Decision was in-line with market expectations. 
  • Norges Bank delivered a 25 basis point rate hike, putting the main rate at 4.25% - the highest level since November 2008. Decision was in-line with market expectations
  • ECB Kazaks said that current outlook does not support rate cut in mid-2024
  • ECB Makhlouf said that there is little change of a rate cut before March 2024
  • ECB Stournaras said that in his opinion rates have peaked and the next ECB move is likely to be a cut
  • ECB Knot said that he is satisfied with where policy is now
  • NATGAS dipped after EIA report showed a slightly smaller-than-expected build of 64 bcf in US natural gas inventories (exp. 65 bcf)
  • US existing home sales for August came in at 4.04 million (exp. 4.10 million)
  • US jobless claims came in at 201k (exp. 225k)
  • JPY and NZD are the best performing major currencies while CHF and GBP lag the most

A potential bullish candlestick pattern is building up on EURUSD on D1 chart. However, if bulls fail to take control over the market and the pair drops below 1.0630 support, declines may deepen towards 1.0530. Source: xStation5

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