Daily Market Roundup: Fed lift-off a done deal after ECB; Will OPEC cut production today?

Today’s Live Market Roundup, in association with ActivTrades, saw Nick Batsford, CEO of Tip TV, joined by Keith Bowman, Equity Analyst for Hargreaves Lansdown, on the Tip TV Finance Show to discuss the ECB meeting, the US NFP data released later today and a major Index outlook.

Draghi set expectations too high for ECB action

Batsford highlighted Elliott, who noted that the classic combination of thin markets with sky high expectations – and Bob’s your uncle. Instead of taking the key ECB rate down another 20 basis points priced in by the sovereign bond markets, Draghi trimmed by just 10 to a negative 30 basis points. Speculation centres on Germany’s Jens Weidmann putting a spanner in the works by suggesting that the Eurozone economy was recovering and that inflation would move back to the 2 per cent target. Bowman added that this was a case of Draghi over-egging the market, and the ECB forward guidance ended up with too high expectations and thus the market was disappointed.

US NFP to confirm a Fed rate hike in December?

Bowman outlined that an interest hike in the US is important on a global basis, with the US economy needing to be stress-tested with a small hike in interest rates to determine its strength. He continued that in an ideal the world the NFP figure released today will be a Goldilocks number, as a too low figure may put pressure on the December hike, whilst an exceptional number may create questions over the pace of rate rises into 2016.

Fed lift-off a done deal after ECB

Batsford moved onto FX Street, who expressed that the ECB undershot expectations, which caused a spike in the EUR/USD, and they continued that this recovery could continue if OPEC hints at a possible cut in the output of oil for the future.

Indices Outlook

Batsford commented that the S&P 500 found resistance at 2100, indicating a continued lack of enthusiasm, and a reversal below 2000 would warn of a test of primary support at 1870. He added that upward breakout now appears less likely, but would signal a fresh advance to 2400.

In terms of Germany’s DAX, he believed that it is retracing to test its new support level at 11000, with respect likely and this would confirm another test of 12400. On the other hand, a reversal below 11000 would warn of another test of 10000, but it is unlikely.

Watch the video to see further technical analysis on the FTSE 100, the Nasdaq 100, the Shanghai Composite, the Nikkei 22 and the VIX.

ECB, Draghi, rate cut, ECB meeting, interest rates, rate hike, policy divergence, monetary policy, bonds, bond markets, Germany, EU, Eurozone, economy, inflation, US, US NFP, non-farm payroll, Fed, Federal Reserve, EUR/USD, OPEC, OPEC meeting, oil, S&P 500, DAX, FTSE 100, Shanghai Composite, Nasdaq 100, Nikkei 225, VIX