US open Stocks react well to Fed jobless claims rise
Wall Street looks set to extend gains after the Fed prepares to rein in support, Evergrande concerns ease and jobless claims unexpectedly rise.
Share this:
US futures
Dow futures +0.5% at 34450
S&P futures +0.4% at 4411
Nasdaq futures +0.14% at 15200
In Europe
FTSE -0.04% at 7073
Dax +0.73% at 15604
Euro Stoxx +0.75% at 4135
Stock aim higher as risk sentiment rises
US socks are set for a strong open building on gains from the previous session following the Fed announcement an easing of concerns over Evergrande and and surprise rise in initial jobless claims.
US initial jobless claims unexpectedly rose for a second straight week highlighting the choppy nature of the labour market recovery. Unemployment claims rose to 351,000 when analysts had expected a decrease to 320,000. Broadly speaking the number of initial claims have been falling across the economic recovery. However, the labour market appears to have hit a soft patch. This is by no means a new trend, but certainly does catch the eye, particularly after last month’s weak NFP.
The data comes following the Fed policy announcement. As expected, Fed left monetary policy unchanged. The Fed also decided against announcing the start of asset purchase tapering. Instead, the central bank pushed back the formal announcement saying that the time was approaching when tapering purchases could be warranted. The Fed hinted that a formal announcement for tapering could be in the November or December meeting.
Whether it is the fact that the taper has been dialed back or that the Fed have removed an element of uncertainty by explicitly talking about tapering; either way the market is in a happier place than it was at the start of the week.
Attention will now turn to the latest PMI data for clues over the health of the economy. Expectations are for both manufacturing and service sector activity to have picked up in September.
Where next for the Dow Jones?
The Dow Jones is extending the rebound from the weekly low and is approaching resistance at 34500 a key support turned resistance. A move over this level will expose the 100 sma at 34700 and negate the near term bearish bias. A move above the 50 sma at 3500 could see the buyers gain traction.
FX – USD declines, GBP rallies post BoE
The US Dollar is trading lower as investors continue digesting the Federal Reserve monetary policy announcement last yesterday.
GBP/USD is rallying after the BoE rate decision. The BoE, as expected kept interest rates on hold and bond purchases unchanged. The central bank voted 7-2 to keep bond purchases unchanged versus 8-1 at the last meeting. There was another BoE policy makers, Ramsden, who joined Michael Saunders and is nervous about rising inflation. The change to the vote lifted the Pound.
GBP/USD -0.13% at 1.3640
EUR/USD +0.04% at 1.1730
Oil eases but remains at two month highs
Oil prices are easing lower but trade near two month highs on the back of tight US supplies. Both Brent and US crude jumped 2.5% in the previous session following EIA crude oil stock pile data which revealed that stocks fell by 3.5 million barrels to 414 million the lowest level since October 2018.
The Gulf of Mexico production is returning, but slowly. Meanwhile, gas prices are still elevated offering a supportive structure for oil prices.
The weaker US Dollar was appearing to offer little support to oil prices.
WTI crude trades -0.15% at $72.25
Brent trades -0.1% at $75.4
Looking ahead
14:30 US manufacturing & services PMI
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
US futures
Dow futures +0.5% at 34450
S&P futures +0.4% at 4411
Nasdaq futures +0.14% at 15200
In Europe
FTSE -0.04% at 7073
Dax +0.73% at 15604
Euro Stoxx +0.75% at 4135
Learn more about trading indices
Stock aim higher as risk sentiment rises
US socks are set for a strong open building on gains from the previous session following the Fed announcement an easing of concerns over Evergrande and and surprise rise in initial jobless claims.
US initial jobless claims unexpectedly rose for a second straight week highlighting the choppy nature of the labour market recovery. Unemployment claims rose to 351,000 when analysts had expected a decrease to 320,000. Broadly speaking the number of initial claims have been falling across the economic recovery. However, the labour market appears to have hit a soft patch. This is by no means a new trend, but certainly does catch the eye, particularly after last month’s weak NFP.
The data comes following the Fed policy announcement. As expected, Fed left monetary policy unchanged. The Fed also decided against announcing the start of asset purchase tapering. Instead, the central bank pushed back the formal announcement saying that the time was approaching when tapering purchases could be warranted. The Fed hinted that a formal announcement for tapering could be in the November or December meeting.
Whether it is the fact that the taper has been dialed back or that the Fed have removed an element of uncertainty by explicitly talking about tapering; either way the market is in a happier place than it was at the start of the week.
Attention will now turn to the latest PMI data for clues over the health of the economy. Expectations are for both manufacturing and service sector activity to have picked up in September.
Where next for the Dow Jones?
The Dow Jones is extending the rebound from the weekly low and is approaching resistance at 34500 a key support turned resistance. A move over this level will expose the 100 sma at 34700 and negate the near term bearish bias. A move above the 50 sma at 3500 could see the buyers gain traction.
FX – USD declines, GBP rallies post BoE
The US Dollar is trading lower as investors continue digesting the Federal Reserve monetary policy announcement last yesterday.
GBP/USD is rallying after the BoE rate decision. The BoE, as expected kept interest rates on hold and bond purchases unchanged. The central bank voted 7-2 to keep bond purchases unchanged versus 8-1 at the last meeting. There was another BoE policy makers, Ramsden, who joined Michael Saunders and is nervous about rising inflation. The change to the vote lifted the Pound.
GBP/USD -0.13% at 1.3640
EUR/USD +0.04% at 1.1730
Oil eases but remains at two month highs
Oil prices are easing lower but trade near two month highs on the back of tight US supplies. Both Brent and US crude jumped 2.5% in the previous session following EIA crude oil stock pile data which revealed that stocks fell by 3.5 million barrels to 414 million the lowest level since October 2018.
The Gulf of Mexico production is returning, but slowly. Meanwhile, gas prices are still elevated offering a supportive structure for oil prices.
The weaker US Dollar was appearing to offer little support to oil prices.
WTI crude trades -0.15% at $72.25
Brent trades -0.1% at $75.4
The complete guide to trading oil markets
Looking ahead
14:30 US manufacturing & services PMI
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels
- Place the trade.
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Canadian Dollar Technical Outlook: USD/CAD Seven-Day Rally Tests Major Resistance 9 29 2026
USD/CAD is pressing into a major technical barrier after an extended advance, raising the risk for price inflection as momentum stretches.
RBA delivers 25bp hike, Bullock now the main event
The RBA delivered the expected 25bp hike, but Bullock’s press conference now looms as the bigger volatility risk for AUD/USD and the ASX 200.
EUR/USD, USD/JPY Outlook: Oil, yields and an FX identity crisis
Crude oil is setting the tone across rates and FX, leaving EUR/USD vulnerable and USD/JPY caught between higher Treasury yields and the growing threat of intervention
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.