News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.23% Gold: -0.07% Silver: -0.97% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/X6JBrsCCnF
  • While @IG_US Client Sentiment is offering a mixed outlook for the S&P 500 and #Dow Jones, these could be at risk to a turn lower based on multiple bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/9kYnq6hH1f https://t.co/bLHDVvd44Q
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.15% 🇳🇿NZD: 0.11% 🇨🇦CAD: 0.06% 🇪🇺EUR: -0.01% 🇨🇭CHF: -0.01% 🇯🇵JPY: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/p80ihot5KY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.00%, while traders in EUR/GBP are at opposite extremes with 67.34%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/PHdbvQq8kU
  • Copper prices may continue to push higher despite a worrying surge in Covid-19 cases and the lack of progress in Congressional stimulus negotiations. Get your #copper market update from @DanielGMoss here:https://t.co/N2OW566nID https://t.co/VJfjTNDdZI
  • The US weekly jobless claim number came in at 870k, in line with expectations. This marked a 4th consecutive weekly reading below 1 million mark, but the rate of improvement in the jobs market appeared to have slowed recently. https://t.co/7pEUQk80C8
  • What is the outlook for financial markets ahead of the first presidential debate and how are Democratic nominee Joe Biden and President Donald Trump doing in the polls? Find out from @ZabelinDimitri here:https://t.co/QQwAZTxZFg https://t.co/MSOw9DeSxe
  • Wall Street Futures Update: Dow Jones (+0.415%) S&P 500 (+0.417%) Nasdaq 100 (+0.466%) [delayed] -BBG
  • - Trump popularity slowly returning despite a surge of US-based coronavirus cases - Democrats drafting $2.4 trillion aid package as urgency for more stimulus swells - #AUDUSD testing key support at 0.7018 – will a break here accelerate the selloff? https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/09/24/AUDUSD-at-Key-Support-Trump-Popularity-Edging-Up-Despite-Virus-Spike.html
  • Looks like the #nifty50 is heading for its worst week since early May (-6.08%), over 4 months ago, granted we still have Friday's session left $USDINR has also been climbing lately Might this continue? Stay tuned for a technical special later today! https://t.co/1vdbgAWs0s
Dow Jones Index: FOMC Leaves Gains Intact

Dow Jones Index: FOMC Leaves Gains Intact

2020-07-29 18:00:00
Thomas Westwater, Contributor
Share:

FOMC, Dow Jones Index, US Economy, COVID – Talking Points

  • FOMC announcement keeps rates unchanged at 0-0.25%, as expected
  • The Dow Jones Index remains higher following the policy statement
  • Fed Chair Powell says "we're in this until we are well through it"

As expected, the Federal Reserve’s Federal Open Market Committee kept rates unchanged Wednesday afternoon at 0-0.25%. The Dow Jones Index was unaffected as the announcement crossed the wires, with the index continuing in positive territory following some brief whiplash, currently higher by 0.29%. With no major policy shifts announced this afternoon, the accommodative stance is still the status quo, as expected.

Dow Jones Index (1-Min Chart)

Dow Jones Index post FOMC

Source: IG Charts

Traits of Successful Traders
Traits of Successful Traders
Recommended by Thomas Westwater
Traits of Successful Traders
Get My Guide

With the Fed already in an aggressive stance following its actions surrounding the COVID-19 pandemic and today’s reinforcement of that stance, upward pressure may continue in the short-term for US equity markets. Indeed, a major boost to markets remains the Fed’s quantitative easing actions through its balance sheet, now hovering just under 7 trillion in total. Regarding the ongoing COVID-19 pandemic, the Fed stated "The path of the economy will depend significantly on the course of the virus."

S&P 500 Versus Fed Balance Sheet

SPX vs fed balance sheet

Chart created in TradingView by Thomas Westwater

Adding to the Fed’s “whatever it takes” stance to support the economy was an announcement extending the lending facilities put in place earlier this year, designed to support the flow of credit throughout the economy. In an implementation note, US Dollar swap lines are also being extended. The US Dollar went back and forth during Powell's press conference, setting fresh intraday lows of 93.22, before spiking higher, and finally back to the 93.34 level, mostly unchanged from before the FOMC statement. In line with the risk-on sentiment injected into markets this afternoon, the Nasdaq index led the pack for US equity indexes, rising nearly 1.50% in afternoon trading.

USD Forecast
USD Forecast
Recommended by Thomas Westwater
Get Your Free USD Forecast
Get My Guide

NDX and US Dollar (5-Min Chart)

US Dollar index vs NDX

Chart created in Tradingview by Thomas Westwater

Speaking following the policy statement release, Mr. Powell noted that weaker demand in travel and hospitality has suppressed inflation, which is now running well below target. Overall, the Fed Chair struck a cautious tone when speaking about the state of the economy, saying "a full recovery is unlikely until people are confident that it's safe to engage in a broad range of activities" and "the path forward will also depend on policy actions taken at all levels of government to provide relief and support the economy as long as needed." As noted previously, the path of the economy remains highly dependent on the path of COVID-19.

US COVID-19 Statistics

US COVID 19 Stats

Source: The COVID Tracking Project

Questions following Mr. Powell's statement surrounded funding facilities, the economic outlook, further policy actions, and overall market health. When asked about lending facilities, the Fed Chair said "it's important that the facilities stay in place," following a question about the lack of use in some of those facilities. Further referring to those facilities, they were referred to as "effectively unlimited." And Mr. Powell said "we feel like we have the ability to do more," after being asked about what the Federal Reserve can do further to support the economy with interest rates already so low. Although, the necessary impact of fiscal policy was also highlighted as being necessary to support economic policy as a whole.

--Written by Thomas Westwater, Contributor for DailyFX.com

Contact and follow Thomas on Twitter @FxWestwater

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES