Wall Street dips on neutral Fed
US indices pared early gains to close lower after the Fed held rates and signaled they would remain low for some time. The European Parliament approved Boris Johnson’s Brexit deal, clearing the way for the UK to leave the EU on January 31 with an agreement that will likely avoid a chaotic separation. The Bank of England is also expected to keep rates unchanged at today’s meeting.
US30USD Daily Chart
The US30 gave back early gains and closed lower amid talk that airlines were seriously scaling back services to mainland China as the coronavirus situation worsens
The 55-day moving average at 28,417 remains intact and has supported prices since October 10
Chairman Powell said the Fed is not comfortable with inflation consistently running below its 2% target while asset valuations are elevated, but not extreme. US Q4 GDP growth is seen unchanged at +2.1% q/q annualized.
DE30EUR Daily Chart
The Germany30 index was little changed at the close yesterday after attempting to push higher in early trading
The index is above the 55-day moving average at 13,283
Euro-zone confidence indicators are seen mixed this month, according to the latest surveys of economists. Industrial confidence is seen rising to -8.7 from -9.3 while services sentiment probably dipped to 11.2 from 11.4.
UK100GBP Daily Chart
The UK100 index rose after the Brexit deal was ratified by the European Parliament, but gave back those gains into a weak close
The index is above the 100-day moving average at 7,376, which has supported prices since December 13
The Bank of England is expected to keep its benchmark interest rate unchanged at 0.75%, with no adjustment to its asset purchase facility either. Surveys suggest three of the committee members could vote for a cut. Market pricing assigns only a 45% chance of such an outcome.
