S&P 500 Falls as FOMC Minutes Trace at Tapering, Hold Seng Might Rebound

S&P 500, HANG SENG INDEX, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 closed -1.08%, -1.07%, and –0.97% respectively
• The FOMC assembly minutes indicated a willingness to start out lowering asset purchases earlier than this 12 months
• Asia-Pacific markets look set to open blended, with buyers ready for AU employment reviews

S&P 500, FOMC Minutes, USD, Southbound, Asia-Pacific on the Open:

Wall Road shares closed broadly decrease on Wednesday after the discharge of the July FOMC minutes, which pointed to a doable begin of the Fed tapering stimulus by the tip of this 12 months. The minutes additionally famous that some Fed members most popular to attend till early 2022 to start out tapering. The central financial institution wished to be clear that the discount of bond purchases was not a precursor to an imminent charge hike. Because of this, Treasury yields noticed a muted response and closed largely flat.

The DXY US Greenback index closed at 93.14 – the very best degree seen since April 2021. Gold costs exhibited resilience regardless of a hawkish-tilted tone within the FOMC minutes and a strengthening USD. Elevated geopolitical tensions in Afghanistan and the current mushy financial knowledge could have supplied gold costs some first rate help. The market seems to have priced in a doable situation of tapering by the tip of this 12 months, and the Jackson Gap symposium could reaffirm this prospect.

DXY US Greenback Index

Wanting forward, Australia’s employment report dominates the financial docket alongside US preliminary jobless claims knowledge. Discover out extra from theDailyFX financial calendar.

Asia-Pacific markets look set to open blended on Thursday. Futures in Japan, Australia, Taiwan, Singapore and India are within the crimson, whereas these in mainland China, Hong Kong, South Korea, Malaysia and Thailand are within the inexperienced.

The Hold Seng Index (HSI) climbed 0.47% on Wednesday, rebounding from a 3-week low. Traders continued to evaluate the influence of Beijing’s regulatory clampdowns on the inventory market, whereas on the lookout for cut price searching alternatives. The inventory connections registered HK$436 million of internet Southbound inflows on Wednesday, reversing a four-day outflow. This implies that mainland patrons are returning for cut price searching after current selloff.

Hold Seng Index vs. Southbound Each day Internet Move

Supply: Bloomberg, DailyFX

Wanting again to Wednesday’s shut, 10 out of 11 S&P 500 sectors ended decrease, with 89.3% of the index’s constituents closing within the crimson. Vitality (-2.4%), healthcare (-1.46%) and knowledge know-how (-1.39%) have been among the many worst performers, whereas client discretionary (+0.15%) closed mildly larger.

S&P 500 Sector Efficiency 18-08-2021

Supply: Bloomberg, DailyFX

S&P 500 IndexTechnical Evaluation

The S&P 500 index is trending larger inside an “Ascending Channel” shaped since November, as highlighted within the chart beneath. The following key resistance degree will be discovered at 4,650 – the 161.8% Fibonacci extension. The general pattern stays bullish-biased as advised by the SMA strains. The MACD indicator shaped a decrease excessive just lately nevertheless, hinting at downward momentum.

S&P 500 Index– Each day Chart

Hold Seng Index Technical Evaluation:

The Hold Seng Index (HSI) breached beneath the ground of an “Ascending Channel”, as highlighted within the chart beneath, hinting at additional losses. The near-term pattern stays bearish-biased, as advised by the downward-sloped SMA strains. The MACD indicator stays beneath the impartial midpoint, underscoring bearish momentum.

Hold Seng Index – Each day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index pulled again sharply to check a direct help degree at 7,500 – the earlier resistance. The general pattern stays bullish-biased, as advised by the consecutive larger highs and better lows shaped over the previous few months. The MACD indicator shaped a bearish crossover after hitting trendline resistance, suggesting that promoting strain could also be prevailing.

ASX 200 Index – Each day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

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