FOMC Rate Decision, Durable Goods, Equity Dominance

German equity markets were getting sold heavily at the open, in what looks to a move that locks in the 8% trading day (15 days worth of trade in one direction) that came on Tuesday, whilst U.K. and French markets were heavily in the green; no wonder there was extreme volatility at the open of London trade that pulled the currencies all over the charts. The FOMC Rate decision is at 14:15 EDT today and will likely cause some volatility as trade desks get aligned for the expected Fed rate cuts.

There is nothing here until of note until the U.S. Futures market really gets going from around 07:00 EDT. Ahead of Durable Goods and a FOMC rate decision it once again will come down to the equity markets ability to hold in the green, or not. We have seen in overnight trade and at the European open that volatility and reaction to equity movement is still very much the order of the day, but hopefully that will calm down once the Fed's rate decision is out of the way. If so we are very well set for the next three months, times that historically have garnered the best results out of any others in the forex market.

Wall Street was able to make a dash for the finish and end equity trade in the green on Tuesday, and in doing so set the tone for global equity markets to test the resolve of Asian and European traders and their ability to continue the buying of stocks that started overnight on Monday/Tuesday. Asian traders did their part, but the European stock traders let things slip at their end at the beginning of play. The signal from the U.S. was that an equity bounce from dramatically oversold areas dragged the higher yielding currencies up against the dollar, and sent the Japanese yen lower. All of which would be expected under normal conditions, but 'normal' has had its challenges recently.

This is the last week of trade in the hedge fund's year, and apart from book-keeping for the next few weeks there will be no more chances to increase the dramatic holes in their equity balance sheets outside of Wednesday, Thursday and Friday trade. This may end up being nothing other than a fool's rally, care still needs to be taken in where we look, but many answers will come from the Asian and European market's ability to hold in the green.

Daily Forex Fundamentals | Written by TheLFB-Forex.com | Oct 29 08 09:54 GMT |