You are here: Home > articles > Forex > Market Comment – Geopolitics and Fedspeak keep stocks under pressure
Market Comment – Geopolitics and Fedspeak keep stocks under pressure
April 17, 2024 8:26 amVideo
Latest News
- Hot forecast for EUR/USD on April 17, 2024 April 17, 2024
- Overview for the GBP/USD pair on April 17th. British inflation could weigh on the pound April 17, 2024
- Technical Analysis – NZDUSD bounces off 5-month low April 17, 2024
- Overview for the EUR/USD pair on April 17th. There is no single reason for the euro to rise April 17, 2024
- Key events on April 17: fundamental analysis for beginners April 17, 2024
- Trading plan for GBP/USD on April 17. Simple tips for beginners April 17, 2024
- Trading plan for EUR/USD on April 17. Simple tips for beginners April 17, 2024
- Technical Analysis of Intraday Price Movement of USD/JPY Main Currency Pairs, Wednesday April 17, 2024. April 17, 2024
- Technical Analysis of Intraday Price Movement of Crude Oil Commodity Asset, Wednesday April 17, 2024. April 17, 2024
- Forecast for EUR/USD on April 17, 2024 April 17, 2024
- Forecast for GBP/USD on April 17, 2024 April 17, 2024
- Forecast for USD/JPY on April 17, 2024 April 17, 2024
- Outlook for EUR/USD on April 17. A boring Monday seamlessly transitioned into a boring Tuesday April 17, 2024
- Will the euro manage to save itself? April 17, 2024
- Analysis for GBP/USD on April 16th. The pound should not count on support from Powell April 16, 2024
- Analysis for EUR/USD on April 16th. The southern trend has been put on pause for correction April 16, 2024
- USD/JPY: Simple trading tips for novice traders on April 16th (US session) April 16, 2024
- GBP/USD: Simple trading tips for novice traders on April 16th (US session) April 16, 2024
- Trading Signals for GBP/USD for April 16-18, 2024: buy above 1.2405 or 1.2450 (21 SMA – 0/8 Murray) April 16, 2024
- EUR/USD: Simple trading tips for novice traders on April 16th (US session) April 16, 2024
Stocks remain under pressure as Fedspeak and US data dent rate cuts chances
Dollar remains dominant against both the euro and the yen
UK inflation surprises on the upside; the pound tries to rally
A plethora of Fed, ECB and BoE speakers to keep the market on its toes today
Stocks remain under pressure across the globe
The market’s attention remains firmly on Middle East developments. With Israel opting for a low-key verbal reaction over the past 24 hours, the market is trying to feel a bit more confident that the situation will not escalate further. However, the possibility of retaliation remains very strong and thus could catch some market participants by surprise.
Amidst these events, US stock indices had a mixed performance on Tuesday. Interestingly, the S&P 500 index recorded its third consecutive negative session with a cumulative correction of 3%.
This sequence has taken place only three times during 2024 with an average drop of around 1.1% each time. Surprisingly, four negative sessions in a row have not been recorded since the 2023 festive period.
The main reason for this continued weakness is the strong US data releases and Fed officials’ commentary. While stopping short of mentioning rate hikes, Chairman Powell on Tuesday highlighted that “the recent data have not given greater confidence in inflation”.
With Vice Chairman Jefferson indirectly stating that rate cuts could be a long way off, Bowman and Mester could also appear hawkish today and potentially inflict further damage to market sentiment amidst a very light US data calendar.
Dollar remains dominant
The euro/dollar pair is hovering at a 5-month low as the market has been forced to react to the divergent monetary policy outlooks. With most ECB members, including President Lagarde, highlighting the June rate cut as the baseline scenario, and the mostly soft euro area data releases, there is scope for another dollar rally today. Especially as ECB members Schnabel, Cipollone and de Cos are unlikely to differ much from the prevailing tune in their scheduled appearances today.
Yen suffers; is intervention imminent?
Dollar/yen is in the red today, but it remains just a tad below its 34-year high of 154.78. Pressure is mounting on the Japanese authorities for a response, despite the BoJ smiling about the potentially higher imported inflation.
In a common statement, South Korea and Japan expressed serious concerns on their depreciating currencies, but the market will likely keep testing them until they intervene, or an external event causes a retracement of the recent moves. Maybe Friday’s Japanese inflation report and next week’s BoJ meeting could turn the tide in favour of the yen.
GBP tries to benefit from the UK CPI prints
The UK’s headline and core inflation indicators recorded sizeable drops earlier today, but they managed to surprise on the upside. The pound is trying to make gains against both the dollar and euro, but today’s performance might quickly reverse when commentary from three BoE members, including Governor Bailey, hits the newswires.
With core inflation north of 4%, oil prices remaining high and a general election campaign gradually getting at full swing, BoE members might find it difficult to justify the current rate cut expectations.
Related Posts: