European Equities Start Lower after the Fed cut Interest Rates by 25 Basis Points

Nikolas Papas

Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).

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European Equities Start Lower after the Fed cut Interest Rates by 0.25%

October 31, 2019

Asian equity indices ended mostly higher today after Fed delivered the 25 basis points to 1.50%-1.75% as widely expected by the markets, and signalled that it will not proceed with further cuts to see whether these easing steps are enough to sustain the economic growth. U.S. GDP for Q3 expanded at a 1.9%, slowing from 2% in the Q2 but came in above market forecasts for growth of 1.6%. Jerome Powell pointed out several reasons why he feels the US economy is doing well, such as robust consumer spending, strengthening home sales, and healthy asset prices.

Nikkei 225 ended 0.41% higher at 22,932. The Hang Seng index is 1.01% higher at 26,937. The Shanghai Composite is 0.20% lower at 2,933. The ASX 200 in Australia is 0.39% lower at 6,663.

European indices started the day lower. DAX is trading 0.62% lower at 12,829. CAC40 is 0.61 per cent lower at 5,730, while the FTSE MIB in Milan is 0.03 per cent lower at 22,642. In London, FTSE 100 is trading 0.95% lower at 7,261. 

In commodities markets, WTI crude oil trades 0.18 per cent higher at $55.16 as global growth worries weigh on crude. Brent oil is trading 0.27% higher at $60.40 per barrel as the world’s oil supply will be affected by the global slowdown. Gold trades higher at 1,497, as the short term momentum turns negative after the price trades below the 50-day moving average. On the upside, strong resistance stands at 1,555.13, the yearly high while support is at 1,458 the recent low.       

In cryptocurrencies, Bitcoin’s (BTCUSD) momentum is neutral. The cryptocurrency retreat today at 9,191, hitting the daily low at 9,053 and the daily high at 9,227. Bitcoin’s short term momentum is neutral now as the cryptocurrency trades above the 200-day moving average and below the 50-day moving average. First support for BTC stands now at $7,364 recent low, while the next support stands at the 7,300 round figure.

On the upside, resistance now stands at 9,925, the recent high and then at 10,000 round figure. Ethereum (ETHUSD) trades lower at 182,69 with capitalisation now to 20.00 billion, on the upside, the immediate resistance stands at 200 recent high while the support stands at 136 the low from May 6th, LTCUSD trades slightly lower at 58.21. The crypto market cap capitalization now stands at $246.32 billion.

On the Lookout: Bank of Japan kept its monetary policy as expected and changed its forward guidance to more clearly signal the future chance of a rate cut.  ANZ Business Confidence: -42.4 vs -54.1 expected. The Japan Annualized Housing Starts came in at 0.897M for September versus 0.891M. Japan Consumer Confidence Index came in at 36.2, above forecasts (35.5) in October

The central bank of China set the Yuan rate (USDCNH) at 7.0582 versus yesterday settlement at 7.0617.  

Trading Perspective: In fx markets, USD index trades 0.01 per cent higher at 97.69, the AUDUSD trades 0.03 per cent lower at 0.6862, while NZDUSD trades 0.10% lower at 0.6349.

basis points
GBPUSD Daily Chart

GBPUSD trades 0.01% higher at 1.2867 as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.3010 recent high while more offers will emerge at 1.3050 round figure.

In Sterling futures markets open interest decreased by 5,700 contracts, volume decreased by around 5.500 contracts.

EURUSD trades 0.01% lower at 1.1111 as the pair’s momentum is bullish. Immediate resistance for the common currency stands at 1.1162 recent high. On the downside, first support stands at 1.1073 yesterday’s low and then at 1.1003 the previous week low.

In euro futures markets open interest increased by 1.600 contracts, the volume decreased by around 18.400 futures contracts.

basis points
EURUSD Daily Chart

USDJPY is trading 0.05% lower at 108.83 having hit the daily low at 108.80 and the daily high at 108.88. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 109.06 recent high.

In Yen futures markets, open interest increased by 5,500 contracts, volume decreased by around 453 futures contracts.

USDCAD is trading 0.05% higher at 1.3092 the pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.  

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