US Fed opens the door for an interest rate rise in December

Thursday, November 19, 2015

US equity markets rallied yesterday following FOMC minutes. The Dow Jones index climbed nearly 250 points (+1.42%) towards 17,740, while the S&P 500 and Nasdaq indices rallied by 1.62% and 1.79%, respectively. The USD index reached a high at 99.853 against a basket of currencies, but the index slid slightly lower this morning after hovering around 99.40. Following a statement after October’s Fed meeting, Fed members made it clear that an interest rate increase would be considered at their “next meeting”, which is scheduled for 15-16th December 2015. The clear message spread optimistic signs across most global markets and increased risk appetite. Most Fed members agreed that US economic conditions are improving, while others agreed that conditions had already been met, in order to trigger a rate increase.

USD index hovers around 99.30

DXY Curncy (DOLLAR INDEX SPOT)   2015-11-19 09-01-55

European equity markets opened higher this morning and rebounded to post renewed gains in early trade. The DAX, CAC, IBEX and London equity benchmark indices climbed between 0.90% and 1.40% this morning while the euro rebounded and hovered around 1.0680 against the dollar. The main focus will turn to the ECB minutes today, which could provide further clarification regarding the European economic conditions. Market participants will be keeping an eye on the release of the UK retail sales, US weekly jobless claims, Philadelphia Fed Business index in November and Leading Index for October.  

Crude oil prices came under renewed pressure yesterday amid ongoing global supply glut concerns. WTI front month futures breached below the key level of $40 per barrel but managed to end the trading session at 40.75 per barrel while the strong USD weighed further on market sentiment. WTI front month futures have been on a downside momentum throughout November, retreating over $8 in less than three weeks.  

Precious metals edged higher this morning with gold gaining towards $1080/ounce while silver extended gains towards $14.50. Platinum and palladium rallied in early trade this morning, while base metal prices remained under renewed pressure with copper hovering around $4,600 and aluminium trading around $1460.

WTI front month futures remain under pressure after hovering around $40/barrel

CLZ5 Comdty (WTI CRUDE FUTURE  D 2015-11-19 09-00-30

Events for today:

0900

EZ

Sep

ECB Current Account

0930

UK

Oct

Retail Sales

1230

EZ

Nov

ECB Monetary Policy Meeting

1330

US

w/e

Jobless Claims

1530

US

w/e

EIA Nat Gas

1500

US

Nov

Philly Fed Business Outlook

1500

US

Oct

Leading Index

 

All times UK Local Time

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