S&P 500 Climbs after FOMC Minutes, Nikkei 225 and ASX 200 Open Combined

S&P 500, NIKKEI 225, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 closed +0.30%, +0.34%, and +0.16% respectively
• The June FOMC minutes confirmed that situations haven’t been met for the Fed to start out tapering
• The VIX volatility index stayed low. Crude oil fell for a second day amid provide uncertainty

FOMC Minutes, VIX, Jobless Claims, Oil, Asia-Pacific at Open:

Wall Avenue shares climbed alongside the US Greenback after June’s FOMC assembly minutes was launched. With out a lot shock, the minutes confirmed that situations of “substantial additional progress” towards the Fed’s full employment and worth stability objectives haven’t been met to warrant scaling again its month-to-month asset purchases. The central financial institution additionally reiterated the view that the current rise in inflation could be “transitory”, though worth ranges are rising sooner than anticipated. The S&P 500 and Nasdaq 100 indexes each closed at all-time highs.

The power sector was lagging behind on Wednesday as crude oil costs fell for a second day amid uncertainties surrounding output hikes fromOPEC+. The American Petroleum Institute (API) reported a big 7.98-million-barrel draw in crude inventories for the week ending July 2nd, underscoring robust demand for gasoline because the summer time driving season peaks. This additionally marks a 7th consecutive weekly fall in US stockpiles, which can present some assist for oil costs.

Market volatility remained subdued because the VIX index prolonged decrease to the pre-pandemic perch (chart beneath). This will likely present a backdrop for giant worth swings if at present’s preliminary weekly jobless claimsknowledge delivers an enormous shock. Buyers are anticipating 350okay unemployment claims to be filed final week. A decrease studying could strengthen Fed tapering stimulus prospects and thus lead the US Greenback greater, whereas the alternative could do the reverse.

Volatility Stays Subdued

Asia-Pacific markets are blended firstly of Thursday’s buying and selling session. Futures in Japan, Hong Kong, South Korea, Malaysia and Thailand are within the pink, whereas these in mainland China, Australia, Taiwan, Singapore are within the inexperienced.

Japan’s Nikkei 225 index appears set to increase decrease after falling 0.96% on Wednesday. Shares in Tokyo are underneath promoting stress as traders mull positive factors in new coronavirus instances in Japan attributable to the Delta variant of the Covid-19 virus. A stronger Japanese Yen may weigh on fairness market efficiency because it makes the nation’s exports costlier to abroad patrons.

Trying forward, ECB financial coverage assembly accounts lead the financial docket alongside preliminary weekly jobless claims knowledge. Discover out extra from DailyFX financial calendar.

Trying again to Wednesday’s shut, Eight out of 11 S&P 500 sectors ended greater, with 66.1% of the index’s constituents closing within the inexperienced. Supplies (+1.01%), industrials (+1.00%) and healthcare (+0.62%) had been among the many greatest performers, whereas power (-1.72%) trialed behind.

S&P 500 Sector Efficiency 30-06-2021

Supply: Bloomberg, DailyFX

S&P 500 IndexTechnical Evaluation

The S&P 500 index breach above a key resistance degree at 4,290 and thus opened the door to additional upside potential. The following key resistance degree may be discovered at 4,650 – the 161.8% Fibonacci extension. The general pattern stays bullish-biased as costs proceed to pattern greater inside a “Ascending Channel” fashioned since November.

S&P 500 Index– Every day Chart

Nikkei 225 Index Technical Evaluation:

The Nikkei 225 index did not breach the 100-day SMA line and has since entered consolidation. The index is testing the ceiling of the “Descending Channel” for assist, breaching which can open the door for additional losses. The MACD indicator fashioned a bearish crossover and trended decrease, suggesting that bearish momentum is dominating.

Nikkei 225 Index – Every day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index pulled again from its all-time highs and entered a technical correction. Costs have probably fashioned a “Bull Flag” sample, which hints at additional upside potential after a interval of consolidation. Instant assist ranges may be discovered at 7,200 – the 127.2% Fibonacci extension. The general bullish pattern stays intact as advised by the upward-sloped SMA strains.

ASX 200 Index – Every day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter