FOMC Minutes Tonight
Today is a big day for US stock markets with the release of the October FOMC minutes ahead of tomorrow’s NFP data. On the back of the hawkish shift from the Fed at that last meeting, today’s minutes are expected to create further headwinds for stock prices, weakening December easing expectations further. However, it is possible the minutes will lose some of their impact given that much of that uncertainty around further easing was based on the absence of data amidst the US govt shutdown. With the govt now reopened and delayed data set to return from tomorrow, those incoming readings will likely be the bigger market driver.
NFP Due Tomorrow
Looking ahead to tomorrow’s delayed September NFP release, there is plenty of room for volatility. The market is looking for the headline NFP reading to rise to 55k from 22k prior with wages and the unemployment rate to remain unchanged at 0.3% and 4.3% respectively. If seen, this should keep December easing prospects muted, leading stocks lower as USD rallies. If we see an upside surprise, this will amplify this dynamic leading to a deeper correction lower in stocks. However, should data undershoot forecasts tomorrow, this could revive December easing expectations, leading USD lower and stocks higher as traders await further data ahead of that December meeting.
Technical Views
S&P 500
The sell off in the index has seen price breaking down through the bull channel lows to test support between 6,587.50 and 6,505.25. This is a key pivot for the market and bulls need to hold this area to maintain the broader bullish outlook. If we break below this support zone, focus turns to the deeper 6,356.50 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.