-1719999627.png)
Powell Comments Boost The S&P
The S&P is pushing back up towards highs today on the back of yesterday’s comments from Fed chairman Powell. Speaking at the ECB’s Sintra Forum, Powell provoked a move lower in USD as he confirmed the bank’s view that the US is back on a disinflationary path as of the last two CPI readings. Powell signalled that the bank is on course to cut rates this year but wants to wait for some further evidence of disinflation before committing to a cut. When questioned over September easing chances, Powell refrained from confirming the move, but market reaction suggests that traders sense a higher likelihood of a Q3 cut now with CME pricing creeping up to 60%.
What to Watch
Looking ahead, there is plenty of US data due today and across the rest of the week. Later today focus will be on the ADP employment reading for June followed by the FOMC minutes this evening. Given the drop off in inflation over recent readings, traders will be scrutinising the minutes to see how much support there is for easing. Given the hawkish shift we saw at the last FOMC, (dot plots and inflation forecasts revised higher), there is room for a dovish surprise if we see policymakers showing support for cuts this year. Finally, on Friday, traders will be watching the latest US jobs report. If we see fresh weakness in these readings, this will be firmly bullish for the S&P near-term with USD coming off as traders ramp up September easing bets.
Technical Views
S&P
The rally in the index has stalled for now into the 5,502.19 level. However, price is now testing above the level once again, putting focus on a fresh breakout higher in line with bullish momentum studies readings. Main support remains at 5,268.67 and rising along the bull channel lows. While the channel holds, focus is on continued upside.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.