Market outlook: Fed makes the quotations

Yesterday the US indices tended to be negative. Then yesterday evening the important head of the New York Fed John Williams came with a speech. His headline statement, which chased over the tickers: “The central bankers should please act as quickly as possible and lower interest rates as soon as there should be the first sign of economic problems! Bumm. That was a score.

The charts are clear. The US Dollar was on its way down, and the stock indices were on their way up. Everything that is traded against the US Dollar is on its way up from now on… apart from oil, because there is a special news situation there. The chart (starting yesterday morning) shows the falling Dollar-Index against the rising Dow.

DAX

The Dollar index lost from 96.80 to 96.35 points, while the Dow rose by 200 points until tonight. The high level could have been maintained in the futures market until this morning. And the Dax? It has risen by 76 points since yesterday evening. The Dax was thus able to close the gap that arose yesterday morning exactly to this morning (chart). At the moment it tends 50 points higher than yesterday evening, even if the trend in the last moments showed 15 points downwards.

What else?

Gold (traded against the Dollar) rose from 1,425 to 1,452 Dollars. So far, however, it has returned to 1,440 Dollars. The probability of a 50 basis point interest rate cut by the Fed increased overnight as a result of the Williams speech. So: First of all, we have the Fed story in the foreground in the short term. Will it determine today’s trading day? A few moments ago, German producer prices were reported weaker than expected (here are the details). Today at 4 p.m. the consumer sentiment comes from the University of Michigan. Important!

Iran

And yes, then there’s the Iran crisis. What a mess. Relaxation or not? A lot has happened in Tehran and the USA since yesterday evening until this morning. We will discuss the whole situation in more detail later on. In any case (so much in advance) the oil price from yesterday afternoon to this morning has made a short hell ride up and down.

John C. Williams. Photo: Federal Reserve Bank of New York

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