FOMC Meeting Minutes and Canadian Ivey PMI Are On The Agenda Today

Equities Took A Dive Yesterday

Yesterday, the U.S. indices wiped off all the gains made on Monday, as the equity markets took a beating, after Fed’s Brainard said that inflation is too high and remains subject to upside risks. The Fed will continue tightening its monetary policy by imposing several interest-rate hikes. The Dow Jones Industrial Average lost around 0.80%, the S&P 500 was down by 1.26% and the Nasdaq 100 was the biggest loser, shaving off around 2.26% Also, one of the other reasons for the declines might have been the U.S. PMI numbers for March. The composite, services and the ISM non-manufacturing PMIs failed to meet their initial forecasts. In our view, the equity indices may start consolidating in the near future, until there is a strong catalyst, which could drive them either way. The markets might see some positivity if the geopolitical issues stabilize, or they could go down if the Fed officials continue coming out saying that they are very hawkish.

Euro Stoxx 50 — Technical Outlook

The technical picture of Euro Stoxx 50 on our 4-hour chart shows that the index is currently trading between two short-term tentative trendlines, a downside one drawn from the high of March 29th and the an upside one taken from the low of March 18th. We would need to see a clear break through one of the trendlines first, before examining the next short-term directional move.

CAD And USD Were In The Spotlight Yesterday

In the currency world, the Canadian dollar attracted many buyers yesterday, after the reports that the U.S. would like to buy more oil from Canada. WTI oil was also seen moving a bit higher after the news, however, the price of oil later on dropped, due to market participants considering the fact that new Russian sanctions might be in the works. Also, the U.S. and some other oil producing countries said that they will tap into their oil reserves to compensate for the shortage that a ban on Russian oil has brought. The stronger U.S. dollar was also a cause for oil prices to move lower at the end of the trading session. DXY was able to overcome the March high and stay above it. For now, we believe that the U.S. dollar might stay under some buying pressure.

Canadian Ivey PMI and the FOMC Meeting Minutes Are Under The Radar

Today, Canada will take the spotlight with its Ivey PMI figure for March, which is expected to rise slightly, going from 60.6 to 61.0. If the figure comes out better than the forecast, this may help CAD strengthen slightly against some of its major counterparts. Even if the number just comes out better than the previous figure, this will show a continuous rise for the fourth month in a row.

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