Wall Street dips as Fed holds rates

Most US indices fell yesterday after the Fed kept rates unchanged, but maintained its hawkish view on the economy and rate trajectory. Oil fell to new seven-month lows.

SPX500USD Daily Chart

Source: OANDA fxTrade

• The SPX500 index fell for the first time this week yesterday, feeling pressure from the Fed’s hawkish rate outlook into December and 2019

• The index failed to test the 100-day moving average 2,822, which has capped prices since the large drop on October 10

• October’s producer price index is due today. Prices are seen rising at the same rate as September, +0.2% m/m and +2.6% y/y. Higher numbers could imply rising pipeline price pressure, which could hurt Wall Street.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index slipped for the first time in three days yesterday after latest Brexit comments from the UK poured cold water on the idea that a deal would be concluded this week

• The index held below the 50% retracement level of the September 27 to October 26 drop at 11,748

• EU Commission said Italy’s 2019 debt-to-GDP ratio could be 2.9% compared to govt ceiling of 2.4%. The EU did not see Italian debt falling in 2019.

WTICOUSD Daily Chart

Source: OANDA fxTrade

• WTI fell for the ninth consecutive day yesterday. The drop from the October 3 high surpassed 20%, suggesting the commodity has entered a bear market

• WTI could find support at the $59.454 level, which is 50% retracement of the advance from June 2017 to last month

• Wednesday’s EIA crude inventory data showed an increase in stockpiles for the seventh straight week. 5.78 million barrels were added.