Wall Street, AUD / USD, AU Inflation, FOMC – Talking Points
- Wall Street trading declines as investors assess the likelihood of a raise
- APAC stock markets anticipate US Federal Reserve decision
- Australian fourth quarter inflation data could expand AUD / USD gains if data beats
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the S&P 500, Nasdaq The composite and the Dow Jones Industrial Average gave up early on Tuesday and closed in the red 0.15%, 0.07% and 0.07%, respectively. The Russell 2000 Index led stocks lower, closing in the red 0.62%. The decline in small-cap stocks may reflect growing fears about Covid-induced lockdowns in the United States, despite the optimistic January consumer confidence figure released this morning by the Conference Board, released Tuesday morning.
The 10-year Treasury bill yield rose six basis points to 1.036%, after US government bond yields fell sharply on Monday. Concerns swirl over the chances of more tax assistance in the United States amid growing repression by Republican lawmakers. Meanwhile, the White House has announced that it is stepping up its vaccine distribution efforts after announcing that the United States will purchase an additional 200 million doses of the vaccine.
S&P 500, 10 Year Treasury Yield, US Dollar – Daily Chart
Chart created with TradingView
Wednesday’s Asia-Pacific Outlook:
Asia-Pacific markets may continue the risk-reducing tone seen in Tuesday’s Wall Street session, with the same concerns about the US fiscal stimulus weighing on investors’ minds. Another likely driver for Wednesday’s session is the Federal Reserve’s upcoming interest rate decision. After weeks of gains in stock indexes and other risky assets, traders may take a cautious approach leading to the FOMC Event.
While the Fed benchmark the prices are Should remain unchanged, economists and other market participants will be guided by President Jerome Powell’s speech on economic recovery and the central bank’s balance sheet. Some expect an over-chance for a rollback in asset purchases, but a ‘wait and see’ outcome may be more likely, particularly with the prospect of further fiscal stimulus following recent changes at Capitol Hill .
Australian dollar traders will be watching the Australian inflation rate in the fourth quarter, which is expected to cross wires at 00:30 GMT. the Australian dollar is up almost half a percent against the greenback so far this week, and the rise could continue if inflation data is impressive. According to DailyFX Economic Calendar, the consensus forecast is 0.7% on an annual basis.
AUD / USD technical outlook
AUD /USD approaches the upper limit of a Symmetrical triangle after breaking its exponential 12-day moving average earlier this week. The aforementioned inflation data will likely be a key driver of price action, but the momentum looks set to continue after a bullish MACD cross. In addition, the relative strength index improves in neutral territory.
4 hour chart AUD / USD
Chart created with TradingView
AUD / USD TRADING RESOURCES
— Written by Thomas Westwater, Analyst for DailyFX.com
Contact Thomas, use the comments section below or @FxWestwateron Twitter