Today's stock and macro update: Fed rate hike a done deal for December?

Nick Batsford, CEO of Tip TV, was joined by Zak Mir, technical analyst for Zak’s Traders Café, and Bill Hubard, Chief Economist for Bullion Capital, when he opened the Tip TV Finance Show to discuss ‘Super Thursday’ for the Bank of England, as well as views on the Fed and a detailed Index and Stock outlook.

BoE minutes and quarterly inflation report

Batsford highlighted FX Street, who noted that a 7-2 vote count today would be hawkish, and would have no change in CPI forecast, and upward revision in GDP and in terms of the EUR/GBP it could result in the pair testing 0.6950. They continued that an 8-1 vote would be neutral, and would result in a downward revision of headline CPI (which is already priced-in) and may provide scope for correction on the EUR/GBP. They finished that a 9-0 vote count would be dovish, and the result of this may be a downward revision of both GDP and CPI, as well as causing the EUR/GBP to recover sharply and form an inverted head and shoulders formation.

Index and Stock Outlook

Batsford noted that the S&P 500 is now just over 1% away from a fresh record high, with breadth of the % of SPX constituents trading above their 10 week moving average now at 80% which indicates and up trending market. He noted that it can remain at this high for weeks, during which time the index could move significantly higher. Batsford added that the S&P 500 is testing resistance at the previous high of 2130.

In terms of the DAX, Batsford commented that it is consolidating below resistance at 11000, which is a bullish sign. He believed a breakout above 11000 and the descending trend line would suggest a test of the previous high at 12400.

Mir outlined MONI, which recently broke above the 50-DMA, and he expected an intermediate rally in the stock.

When concerning EUA, Mir commented that the junior miners remain chirpy and are the leading indicator of a mining recovery.

Watch the video to see more analysis on the NASDAQ 100, FTSE 100, Shanghai Composite, Nikkei 225, VIX, as well as GLEN, PSN, ETO and SML.

December a ‘live possibility’

Batsford highlighted Elliott, who expressed that at Congress’ House Financial Services Committee chairman of the Fed Janet Yellen said that a December rate rise is a ‘live possibility’ – taking Fed-speak to a new level. She then added that, ‘now no decision has been made on that and, what it will depend on, is the FOMC’s assessment at the time’. Later last night the Fed’s Fischer said, ‘US inflation is not as low as you think’ – despite market’s inflation expectations dropping to a new record low. Hubard added that in his opinion December is a done deal for a US interest rate hike if unemployment stays at 5.1% because Yellen has backed herself into a corner.

Tags: BoE, inflation, CPI, UK GDP, EURGBP, S&P 500, DAX, MONI, EUA, NASDAQ 100, FTSE 100, Shanghai Composite, Nikkei 225, VIX, GLEN, PSN, ETO, SML. Fed, Federal Reserve, interest rates, rate hike, US, UK, FOMC, Yellen, unemployment