- S&P 500 extends Wednesday’s losses as markets don’t like absence of rate cut hints.
- Fed favored easy money but suggested no more actions in the short-term.
- Vaccine hopes remain bright, US policymakers keep jostling over stimulus package.
- Aussie employment, BOJ to entertain Asian traders, BOE may dominate afterward.
S&P 500 Futures drop to 3,369, down 0.30% intraday, amid the initial hour of Tokyo open on Thursday. In doing so, the risk barometer follows the Wall Street benchmark’s performance after the US Federal Reserve’s (Fed) hawkish halt. Also weighing on the equity derivate could be the mixed signals from the coronavirus (COVID-19) vaccine front and also concerning the US aid package.
The Federal Open Market Committee (FOMC) upwardly revised short-term economic forecasts while reiterating their pled to do “whatever necessary”. The US central bank also includes the Average Inflation Targeting (AIT) method while showing readiness to keep the easy monetary policy even if the inflation shoots above the 2.0% target. Though, what gained the market’s major attention was the dot-plot that suggested no major changes in the Fed rate in the near-term.
Elsewhere, US President Donald Trump said that the COVID-19 vaccine will be distributed by late-October while policymakers in the UK, China and Russia are also upbeat about finding the cure of the pandemic. However, the actual results are yet to arrive and the recent surge in the American numbers, not to forget a steady rise in the cases from India, keeps the global traders worried.
Additionally challenging the market sentiment could be the deadlock over the US Congress proceeding over the much-awaited aid package. Although President Trump hinted the solution to arrive soon, House Speaker Nancy Pelosi’s rejection of holding the votes on a package around $1.5 trillion shows that the Democrats are in no mood to relinquish controls.
Furthermore, US President Trump criticized the World Trade Organization (WTO) for its favor to China, which in turn may recall the trade war headlines that have been silent off-late.
Looking forward, traders will keep eyes on the busy economic calendar for near-term moves. However, any major positives concerning the virus and/or trade can recall the bulls. For that matter, the American session will be the key to follow.
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