Market Snapshot – Markets in Consolidation Phase
Stocks in Choppy Trade
The day has been marked by choppy trading with no specific direction in both the stock and the currency markets as the traders and investors await the FOMC tomorrow which is likely to set the tone for the short term. The market expects the Fed to be hawkish about the economy and also give its view about the strength of the US economy as it stands right now and this is what is supportive of the dollar so far. The European stock markets have tried to make a move higher earlier in the day but that move was beaten back and now they trade in a consolidation phase within a typical range as we have been seeing over the past couple of weeks and this is set to continue in the short term. This is especially true in the case of the DAX which awaits the German elections that are scheduled to be held this weekend.
Currencies Await the FOMC
Apart from the consolidation phase in the stock markets, we have been seeing some ranging in the currency markets as well, and also in the gold instrument as well as the traders seem to be positioning their trades for the FOMC tomorrow. We believe that the market is expecting too much from the Fed and they may not be in a position to deliver that just as yet. This is likely to leave the markets disappointed and will place the dollar on the backfoot.