Global stock markets retreated during yesterday’s trading sessions after Tuesday’s strong moves, investor concern over trade and political issues is still weighing on overall confidence. US stocks were further pressured later in the day after the Fed minutes indicated increased rate hikes could be coming and earnings reports were mixed. Fed members had debated pushing rates up to restrictive territory and this helped yields push to the topside with the 10 years trading back up to 3.21%, the dollar had it’s best day in nearly two weeks and Oil dropped back through $70 a barrel.
The markets looks set to continue trading in line with the vagaries of investor sentiment for the short to medium term. The US-China trade war doesn’t look like it’s going die down anytime soon with President Trump yesterday declaring that the US is winning and Brexit still rumbles on with no set date yet for a deal. There does seem to be an acceptance in the market that we’re at best due a significant correction or at worst a longer period of downside moves as last weeks moves and the market reaction to them probably proved.
Currencies remained largely rangebound yesterday despite that significant rally in the greenback and traders will once again be looking at certain levels that are close in a few of the pairs for some inspiration and a break out of long held ranges. Aud and Nzd are again within striking distance of recent lows in the majors, but there’s probably a higher likelihood of breaks coming in EM’s first with UsdCny back at recent highs again and other Asian EM’s also still looking relatively weak.