Stocks Drift Lower As Fed Confirms Patient Approach
US Stock markets closed lower after the Fed’s latest Meeting Minutes confirmed it’s patient approach in the current environment pushing out the possibility of a rate cut in the short term. Global bourses had experienced a mixed day but the combination of uncertainty on trade and a pausing Fed pushed the US indices into the red, the Nasdaq closing down 0.45%, the Dow 0.39% and the S&P 500 0.28%. Currencies were relatively stable again with risk pairs remaining under pressure and the dollar grinding higher, the Dxy seemingly happy back above 98.00 again. Oil took a big hit as US stockpiles surged and trade concerns continue to pressure demand, the WTI fell over 3% on the day to close back around $61.30 having found some support around $61 earlier in the day and Brent is back around $71.
Asian investors hoping for a bit of a shot in the arm for global markets from the Fed minutes overnight will wake up disappointed this morning. The minutes confirmed the recent rhetoric that we’ve heard from the majority of Fed members and analysts will now go back to digesting the most recent updates in the on going trade issues between China and the US for the next moves in the market. Global growth concerns will continue to grow as time slips by and relations between the two superpowers seemingly get worse, we’ve seen a correction in the market since the increase in tariffs but now investors will need to see some signs of progress or positive data before any significant relief rally can take place. If the situation looks like getting worse, both on the trade front and for global forecasts then we may see some much more significant downside corrections in the weeks to come.
Looking ahead to today’s trading sessions and the event calendar is relatively quiet in the Asian session. Flash PMI data and the ECB Meeting Minutes out in Europe will be a major focus for traders on the London open as will the continuing Brexit saga for sterling traders. It’s quiet in the US session in terms of scheduled releases but once again expect sentiment drivers to dominate market moves.