Daily Markets Broadcast 2019-01-31

Daily Markets Broadcast

2019-01-31

Wall Street gains on patient Fed

The US FOMC kept rates unchanged at yesterday’s meeting, as expected, and removed the reference to gradual rate increases in the accompanying statement. Day two of the US-China trade negotiations gets under way. China’s January manufacturing PMI beats estimates.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index advanced yesterday as Fed Chairman Powell said the case for raising rates had been weakened somewhat.
• The index traded above the 100-day moving average at 24,959 yesterday for the first time since December 4
• The Fed also said it is prepared to adjust balance sheet normalization in light of economic and financial developments, implying they stood ready to scale back the tapering of its quantitative tightening activities.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index closed little changed yesterday as European sentiment indicators produced mixed results with a weaker bias
• Possible bearish divergence unfolding on the daily stochastics indicator, which suggests the 100-day moving average at 11,404 will hold for now
• Euro-zone Q4 GDP growth is scheduled to be released today. It’s expected to dip to +1.2% y/y from +1.6%. A deeper slowdown could be negative for the index.

CN50USD Daily Chart

Source: OANDA fxTrade

• Chinese shares advanced for a second day yesterday as the US-China trade negotiations got under way in Washington
• The China50 index is edging toward the 200-day moving average at 11,447, which has capped prices since April 13 last year
• China’s January manufacturing PMI came in at 49.5, topping estimates of a 49.3 reading. The non-manufacturing index rose to 54.7 from 53.8 in December.

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