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S&P 500: The rally ends, the dollar tries to resurface

  • Wall Street futures are in the red, capping the two-day rally.
  • Metals erase some of the recent gains.
  • Expectation for OPEC+ announcement.

In the previous one, US stocks fell almost 1% after two days of strong gains. In Europe, the main stock markets also operate in the red. Caution in the markets is still present in the face of fears of a global recession. The dollar is back on the scene and yields are on the rise again. Metal crash.

The rally loses steam

After the most significant two-day rally in two years, US stock futures point to a pullback on Wednesday. In the previous the S&P 500 loses 0.90%, as does the Dow Jones while the Nasdaq yields 0.85%. In London, the FTSE 100 fell 1.04%, in Frankfurt the DAX fell 0.78% and in Paris the CAC 40 lost 0.74%.

The final data of S&P Global Eurozone PMI Europe confirm the slowdown in activity, with data showing a contraction in September. Despite the recent air in the stock markets and in raw materials, the expectation of a global recession has not changed.

In the UK, the Prime Minister Liz Truss speaking before a Conservative Party conference. There he defended his tax plan and indicated that the change in leaving behind the 45% rate was because it had become a distraction. The Bank of England reported that it has bought less than 4,000 million pounds in British bonds. GBP/USD resumes declines after hitting highs above 1.1500 and trading below 1.1400. Volatility in pound crosses is expected to remain elevated.

The dollar is rising after two days with significant declines. The DXY rises 0.58%, and is trading at 110.85 after bottoming Tuesday at 110.04. The green ticket rears its head again. In minutes, US data will be known that may have an impact on the dollar and the market.

The economic calendar shows ahead the September Employment ADP and the figures of the services sector (S&P Global PMI final and the ISM), among the most relevant. On Thursday it will be the turn of the requests for unemployment benefits and on Friday it will be the turn of the official employment report for September, with the expectation of an increase in non-agricultural payrolls of 250,000.

The Reserve Bank of New Zealand raised the interest rate by 50 basis points. He indicated that he considered raising it by 75 bp. In this way he moved away from what he did on Tuesday the Reserve Bank of Australia, which moderated the rate of rises with an increase of 25 bp. The kiwi was favored but momentarily. NZD/USD hit as high as 0.5805, the highest since September 23, but is already close to 0.5700. AUD/NZD fell to two-week lows at 1.1238, but then returned above 1.1320.

Elon Musk revived the proposal to buy Twitter according to the price of the first offer. Shares of the social network rise 22% in the previous one. Among the companies to present results on Wednesday are Tesco and Helen of Troy.

Oil prices operate with volatility and still without a defined direction. The focus is on what can be announced by the Organization of the Petroleum Exporting Countries and its allies. It is estimated that there could be a cut of up to two million barrels per day. It is the first time in two years that they have met in person in Vienna. WTI barrel was up over 1% but is now in slightly negative territory trading at $86.20.

The Treasury bond yields resumed gains. The 10-year tranche is moving away from the 3.56% reached on Tuesday and was momentarily above 3.70%. This advance favored the sharp pullback in gold, also hurt by possible profit-taking in silver after the big rally. The XAU/USD after rising $60 in less than 48 hours, is retreating towards $1,700. For its part, XAG/USD falls from the peak of $21.25 and went as low as $20.28 (this sharp drop returns less than half of the profits).

The cryptocurrencies they retreat in line with the markets and the rise of the dollar. The Bitcoin it approaches $20,000, while Ethereum loses 1.35% and trades at $1,343.

Technical levels

SP500

Panorama
Last Price Today 3760.73
Today’s Daily Change -29.28
Today’s Daily Change % -0.77
Today’s Daily Opening 3790.01
Trends
20 Daily SMA 3830.4
50 Daily SMA 4003.53
100 Daily SMA 3956.78
200 Daily SMA 4183.43
levels
Previous Daily High 3790.2
Previous Daily Minimum 3721
Previous Maximum Weekly 3726.71
Previous Weekly Minimum 3612.17
Monthly Prior Maximum 4144.18
Previous Monthly Minimum 3612.17
Daily Fibonacci 38.2% 3763.77
Daily Fibonacci 61.8% 3747.43
Daily Pivot Point S1 3743.94
Daily Pivot Point S2 3697.87
Daily Pivot Point S3 3674.74
Daily Pivot Point R1 3813.14
Daily Pivot Point R2 3836.27
Daily Pivot Point R3 3882.34

Source: Fx Street

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