S&P 500: Timid rebound in futures, markets without clear direction

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  • Stocks flat after Fed minutes.
  • Metals rise from daily lows but do not change negative tone.
  • Financial markets without clear direction on Thursday.
  • Turkey surprisingly lowers the reference interest rate.

Following Wednesday’s decline, Wall Street futures are marginally higher. The recovery rally is losing pace. The dollar and Treasury bonds without major changes. Metals trim losses.

The rally loses momentum

The S&P 500 closed Wednesday down 0.50%while futures point to a timid recovery with 0.11% rise in futures. In the previous one, the Dow Jones climbs 0.10% and the Nasdaq 0.09%. In London, the FTSE 100 fell 0.09%, while in Frankfurt the DAX rose 0.67% and in Paris the CAC 40 climbed 0.34%.

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In the preview, Cisco shares rose more than 4%, boosted by higher-than-expected earnings reports. Bed Bath & Beyond falls 13% after the announcement of investor Ryan Cohen to sell his stake. On Thursday, Estee Lauder, Tapestry, Kohl’s, Ross Stores, and Applied Materials will present results, among others.

On Wednesday the Federal Reserve published the minutes of the last FOMC meeting, without providing further clarity on how far the central bank is willing to go in terms of interest rate hikes. Market reaction was limited. The focus is on economic data.

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Tensions continue between China and USA for Taiwanafter the start of trade negotiations between the latter two, to which the former opposes.

In the Asian session, Australia reported that 40,900 jobs were lost in July, against expectations of an increase of 25,000, while the unemployment rate fell to 3.4%. The impact on the Australian dollar was limited. AUD/USD erased daily losses and trades at 0.6950.

The Central Bank of the Republic of Turkey surprised with a cut in the benchmark interest rate of 100 basis points to 13%, which sent the lira down sharply. USD/TRY jumped above 18.00.

To the annual inflation data of the United Kingdom exceeding 10% in July yesterday, the confirmation of a rise in the Eurozone from 8.6% to 8.9% was added today. The member of the European Central Bank, Martins Kazaks affirmed that the bank will continue to raise rates to curb inflation.

The prices of Petroleum are rising on Thursday, with a barrel of WTI climbing more than 1%, approaching $90.00. The picture oscillates between a global slowdown in activity and some positive signs from the US economy and expectations from the Organization of the Petroleum Exporting Countries and its allies.

Following the Fed minutes, Treasury yields had no clear direction. The 2-year bond hit highs in months but then returned to the previous range and is at 3.26%, the 10-year tranche at 2.86% and the 30-year tranche at 3.12%. The curve is still inverted.

The Dollar Index (DXY) falls 0.04%, with major currency pairs moving sideways with no clear direction. In the European session the dollar erased the gains. EUR/USD remains below 1.0200, while GBP/USD found support at the 1.2000 zone.

The stability in yields helped the Prayed to find retracement support from $1,800; XAUUSD bounced at $1760, back towards $1770. For its part, the silveralso recovers from daily lows at $19.60 towards $19.90.

The economic calendar ahead for Thursday shows the weekly jobless claims report, existing home sales and the Philly Fed survey. Neel Kashkari and Esther George of the Fed will speak.

The cryptocurrencies they present mixed results and fail to resume recovery. Bitcoin rises modestly after hitting daily lows and trades at $23,500.

Technical levels

Source: Fx Street

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