HomeForex MarketNearing Key Pivot Forward of FOMC Resolution

Nearing Key Pivot Forward of FOMC Resolution

FTSE 100 Evaluation and Speaking Factors

  • Chair Powell’s Press Takes Centre Stage With Fed Anticipated to Hike 75bps
  • FTSE 100 Nears Key Pivot

FTSE 100:In the present day’s focus for merchants might be firmly on the Federal Reserve charge resolution and extra particularly Fed Chair Powell’s press convention. Heading into the assembly the expectation is for the Fed to ship a back-to-back 75bps charge hike, taking the Fed Funds Fee to the earlier cycle excessive. Nonetheless, it is going to be Chair Powell’s feedback concerning the speed outlook that would be the key driver for markets and given the latest slowdown in financial exercise there’s a rising sense that the Fed may soften its tone. In my opinion, I nonetheless see the Fed sticking to its aggressive hawkish stance, notably as headline CPI has but to have peaked. As we’ve seen beforehand with the Fed nonetheless doing QE again in March, the Fed could be gradual to pivot and thus with Fed Officers laser-focused on lagging inflation information, it will stay the case. As such, even when the Fed Chair backs away from a 100bps consideration can immediate a bid in equities, as seen on the final two conferences, positive factors have usually been short-lived.

S&P 500 Chart: Each day Time Body

Supply: Refinitiv

That being mentioned, I nonetheless lean bearish equities, which brings me to the FTSE 100. The index has carried out considerably higher than its main counterparts due to the shortage of tech shares and its bigger publicity to the commodity sector. Nonetheless, as financial exercise slows globally, the rising danger of a recession will possible weigh rather more closely on commodities and by extension the FTSE 100. From a technical standpoint, the 200DMA (7360) has been an enormous pivot space for the index, capping latest upside. What’s extra, the index has additionally failed to shut above the 200DMA for the reason that surprising US CPI print launched in June. As such, for these bearish on the index, the 200DMA is usually a good space to lean in opposition to.

FTSE 100 Chart: Each day Time Body

FTSE 100 Outlook: Nearing Key Pivot Ahead of FOMC Decision

Supply: Refinitiv

Additional studying

US Greenback, EUR/USD, AUD/USD Value Motion: Fed, Q2 GDP and CPI In Focus

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