Stocks are trading higher almost everywhere on Thursday in the aftermath of the highly anticipated decision of a 25bp rate cut by the FOMC committee yesterday evening. Jerome Powell reassured investors with the new 1.75%-2% rate range. Traders welcomed the fact that the FOMC did consider worries over slowing economic growth globally as well as lingering trade tensions into its monetary policy decision. Powell also surprisingly added this week’s money markets issues wouldn’t affect monetary policy even though the FED will keep on conducting operations as necessary to fight the current liquidity squeeze and overnight measures were effective so far.
Photo by Mostafa Meraji.
Now the focus will shift back to the international scene with trade talks still looming and geopolitical tension surging after Saudi Arabia officially blamed Iran for Saturday’s attack on its oil facilities.
Elsewhere traders will follow today’s decision on interest rate by the Bank of England. While most investors don’t expect any rate cuts or hikes, Mark Carney’s tone during the post-decision press conference will be scrutinized as the 31st of October Brexit deadline looms. The FTSE-100 keeps on trading inside its bearish short-term channel but recently identified the 7,290.0pts price level as a strong support zone for prices. The market is now heading for the upper level of the bearish channel, with 7,340.0pts in sight. A clearing of this level could prolong the current rally to 7,355.0pts and 7,375.0pts by extension.
