Stocks are already displaying plenty of nervousness ahead of the Fed decision this week, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Dow notches up new high but other indices muted
A new record high for the Dow contrasts with a more cautious attitude across most other equity markets, where gains have been limited at best. A cautious pruning of risk has been in evidence for most of the day, with the mood soured by reports of poor sales for Apple’s new product.
Stocks look towards Wednesday’s Fed meeting
Last week saw a late surge in expectations around a 50bps rate cut, a recognition that the Fed’s window to ease policy is limited by the election. Recession fears have spiked dramatically, and investors have an unnerving feeling that the Fed is firmly behind the curve. A 50bps move might help to stop that perception from spreading further, though Powell will have to perform a delicate balancing act to avoid giving the impression that they are more concerned about the near-term outlook.
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GBP/USD holds recovery above 1.3400, with eyes on UK PMI, Middle East woes
GBP/USD is holding its rebound above 1.3400 in the European session on Monday. The fears that Iran would retaliate against US attacks on its nuclear sites continue to support the safe-haven US Dollar. Investors await the June preliminary PMI readings from the UK and the US for fresh trading directives.
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