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06.01.202212:37 Forex Analysis & Reviews: Daily stock market update: Omicron cases and Fed minutes cooled the market

Exchange Rates 06.01.2022 analysis

S&P 500

The US market shrank after the Fed released its minutes of the meeting. Dow lost 1%, while NASDAQ and S&P 500 dipped by 3.3% and 2%, respectively.

Asian markets also posted declines this morning, with Japan indices slipping by 2.2% and China indices falling by 0.8%.

Oil also weathered slightly on Wednesday, but Brent remained above $80 despite falling by about 1%.

On the bright side, gas supply in the US increased over the week, by roughly 10 million barrels. Distillates also rose by 4 million barrels, while reserves decreased by 2 million barrels.

The possible reason why the amount surged is the dramatic decrease of travel in the US caused by the holidays and another outbreak of covid.

Talking about covid, the total number of new cases all over the world hit 2.55 million yesterday. Around 700,000 came from the United States, 330,00 from France, 194,000 from the UK, and 189,000 from Italy. Fortunately, mortality is low and is kept at pre-omicron levels.

Going back to the US market, the S&P 500 closed at 4.700 points, with a range of 4.660 - 4.740 points. The driver of the fall was the FOMC minutes, which discussed the possibility of raising rates as soon as the bond purchase program is completed. It also mentioned how the central bank is starting to lower its balance sheet, which will undoubtedly raise interest rates in the market and the cost of credit. The tech-heavy NASDAQ also fell 3% yesterday.

General Motors unveiled a new electric Chevy model, while Sony is planning its own production of electric vehicles. Obviously, the global auto industry is actively turning from internal combustion engines to electric vehicles in mass production.

With regards to macroeconomic data, ADP published its December employment report, which indicated an increase of 420,000. Today, the ISM is the one releasing data about the service sector. Analysts expect it to be 67%, slightly below November's 69%.

USDX 96.30, range 96.00 - 96.60. The dollar has remained virtually unchanged since the release of the Fed minutes. Range.

USDCAD 1.2800, range 1.2760 - 1.2840. The pair received support from the Fed's protocols - and has not yet paid attention to oil prices.

Conclusion: the S & P500 index fell to almost 50-day moving average - and today both a rebound upward after yesterday's fall and a continuation of the decline are possible. The market, despite the fall yesterday, is still very high - if this is a big correction, then this is the very beginning.

Talking about dollar, there was a slight rally yesterday, so USDX hit 96.30 points, with a range of 96.00 - 96.60.

Accordingly, USD/CAD traded at 1.2800, with a range of 1.2760 - 1.2840. The pair has not yet paid attention to oil prices.

Conclusion: The S&P 500 is near the 50 MA. It may bounce up today before continuing to decline.

*Analisis pasar yang diposting disini dimaksudkan untuk meningkatkan pengetahuan Anda namun tidak untuk memberi instruksi trading.

Jozef Kovach,
Pakar analisis InstaForex
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