European Equities Recover, FOMC Press Conference in Focus

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.

FOMC Update

European Equities Recover, FOMC Press Conference in Focus

January 30, 2020

Earnings report from major league brand icons to dominate Wall Street activity, Fed rate decision press conference also remains in focus. 

Summary: Global equities rebound from recent lows on Wall Street cues from the previous session. Positive cues from US markets helped outweigh virus outbreak concerns which along with cues from Asian markets helped European indices open on a positive note.

Shortly following the European session starting for the day, gains from bank-sector shares led a fresh wave of bullish rally which kept risk assets underpinned giving bulls a much-needed break from multi-session long steep declines. The forex market saw USD ease off while other major risk currencies gained momentum. 

Precious Metals: While risk appetite recovered in the market, a relatively weaker USD helped rare metals hold steady near weekly highs albeit maintain range bound activity. As the death toll of the Chinese virus outbreak continues to spike with each passing day, rare metals are unlikely to see decline anytime soon.

Crude Oil: Crude oil price continues to fall sharply in global market. Despite efforts from OPEC to curb supply-demand continues to decline as the Chinese virus outbreak took out the top player in the market creating an unexpectedly huge decline in demand resulting in glut scenario. 

AUD/USD: After seeing a slight recovery in the early Asian session, the pair is mostly trading flat in the global market today. Price continues to oscillate around 0.678 handle with strong support around mid-0.67 handle. However firmer USD despite a slight easing in today’s session kept gains in check. 

On The Lookout: Coronavirus outbreak death toll count scaled above 130 as per latest headlines keeping concerns of traders fresh because as long as China is closed, the more the global economy will decline owing to trade-related ties.

Trump impeachment proceedings took a new turn as headlines saw Senate majority leader Mitch McConnell state he didn’t have enough vote to block democrat demands for witnesses such as former Nation Security Advisor John Bolton from testifying.

FOMC Press Conference

Wall Street earnings report reaches peak season as the market will see a release of the report from US giants such as Facebook, Tesla, General Electric, Mastercard, AT&T, Boeing, McDonald’s, PayPal, ADP, DOW, Marathon, and few other industry-leading brand names. North American session will also see FOMC press conference in which fed members are likely to comment on repo rates and provide forward guidance having taken the recent impact and forecasted impact of coronavirus outbreak which is likely to provide some level of directional bias.

On the release front, the US calendar sees Pending Home Sales data and EIA/API Crude oil Inventories. 

Trading Perspective: Better than expected earnings reports from Apple, and positive cues from the international market to push Wall Street indices to record levels at North American session opening as evidenced from the activity of US index futures trading in the international market. Earnings reports from American major league brand icons awaited for profit opportunities. 

EUR/USD: Despite broad-based risk on investor sentiment, the pair keeps challenging critical support level of 1.10 handle as caution increases with approaching Brexit deadline. But declines capped on positive German Consumer Climate data. Traders await US data for short term profit opportunities. 

GBP/USD: The pair continued its decline for the fourth consecutive session today but managed to hold steady above the 1.300 handle on easing USD. BOE rate cut speculation and Brexit woes keep GBP bulls under pressure. Caution ahead of upcoming rate decision from the US Fed and BOE keeps sharp declines in check. Traders await US data for short term profit opportunities.

USD/CAD: The pair is continuing to trade well inside tight range today as broad-based risk appetite caused USD to ease from recent highs. Declining crude oil price and positive US bond yields kept USD bulls underpinned. Traders now await US data and Fed rate decision updates for directional cues and short term profit opportunities. 

Please feel free to share your thoughts with us in the comments below. 

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