S&P 500 (SPX) waits for Powell as ADP helps doves and GDP helps hawks

S&P 500 remains rangebound as we wait for Powell.
ADP employment data shows Fed hikes finally stalling the jobs market.
Limited gains likely though before Powell's speech later Wednesday.

Ivan Brian FXStreet

Equities snoozed across the finish line on Tuesday with little catalyst. The Dow closed completely flat almost to the tick. The NASDAQ was lower by 0.7%, and the S&P 500 was also barely changed. Energy (XLE) was the biggest winner as oil prices recovered. China reopening is good news for oil. Well, that is the assumption anyway!

S&P 500 (SPX) news

This morning we wait for Powell later who may give this market some direction. ADP jobs data just out will give the Fed pause argument more wings, and doves are taking flight as we speak. The US Dollar has weakened, and equities moved higher on the data. Powell will have the final say though, and he has been notably unhappy with loosening financial conditions in the past. The second reading of US GDP is higher and confirms the US economy is resilient. This gives Powell plenty of room to hike further.

S&P 500 (SPX) forecast

Powell will drive the market, so we can just identify the key levels to watch for. 3,946 is strong support, and below 3,900 (highlighted) is the medium-term pivot. Resistance sits at 4,502 from the 200-day moving average and 4,095 from the trendline. The extended target reads at 4,218 on any break higher, which comes from the gap on August 19. 3,946 is the short-term pivot, and remaining below leads to 3,900 and a likely extended move lower.

SPX daily chart

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.