Wall Street Close: Bears tighten grips on FOMC Minutes, coronavirus woes

US equity benchmarks extend Tuesday’s losses with more power.
FOMC Minutes back tapering concerns, hints at dissatisfaction from employment recovery.
Lowe’s benefit from upbeat earnings, US housing data disappoints.
US Jobless Claims, covid updates will be in focus for immediate direction.

Anil Panchal FXStreet

Wall Street closed in red for the second consecutive day by the end of Wednesday’s North American session as neither the Federal Open Market Committee (FOMC) Minutes nor qualitative catalysts offered any relief to the markets. On the contrary, downbeat housing data added to the bearish impulse.

Read: Forex Today: Dollar retains its strength post-FOMC Minutes

Minutes of the July Federal Open Market Committee (FOMC) meeting also exerted downside pressure on the risk appetite as it marked divergence from the policymakers’ comments favoring the monetary policy adjustments. In addition to shedding the rate hike concerns, despite supporting the tapering, the dissatisfaction of employment recovery also portrayed pessimism at the Fed.

On the other hand, geopolitical concerns relating to Afghanistan and the fact that the US leads the world in reported COVID-19 cases and deaths, per Reuters, also weigh on the market sentiment.

Furthermore, a drop in US Housing Starts, in contrast to upbeat Building Permits, for July also troubled the market players and weighed on the US stocks.

That said, the Dow Jones Industrial Average (DJI) and S&P 500 dropped the most since July, down 1.08% and 1.07% respectively to 34,960 and 4,400. Further, Nasdaq dropped for the second consecutive day, by 0.89% or 130 points to 14,525.

It’s worth mentioning that the US Treasury yields remained lackluster, mildly up, whereas commodities traded mixed ahead of Thursday’s Asian session.

Lowe’s jumped over 9.0% following a positive surprise from Q2 earnings and Salesforce.com also marked around 1.5% daily gains on revised price target from the key US banks. Above all, shares of Werewolf Therapeutics jumped 13% following the deal with Merck.

Looking forward, weekly jobless figures from the US and risk catalysts will be the key factors to watch for fresh impulse as investors digest the key data/events that already passed.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.