Mar 29, 2016, (11:12pm EDT)
Wed, 30 Mar, 2016( 8:43AM IST)
After saying that April was a “live month” for another rate hike in March meeting of FOMC, on Tuesday the Fed Chair Janet Yellen completely changed her tune and narrated only what all was negative with global economic conditions and that, a gradual rate hike was more preferable.
With her dovish comments Gold, the Dollar index and bond yields fell while U.S. stock markets went higher. Some economic experts are now counting only one rate hike from the Fed this year as compared to earlier expectations of four and then two.
As expected Asian markets have jumped on this “generous news” that their free credit line is not going to dry up anytime soon. Most of the Asian markets are trading higher, except Nikkei (Japan) which is subdued after some bad economic reports. U.S. and European stock futures are still positive and SGX Nifty is trading nearly 60 points higher, indicating a higher opening in Indian markets soon.
Oil futures are also trading positive in Asia after recent downturn.
Now that the incumbent Fed Chair has once again played to market galleries, expect a positive first half in global markets. Oil is still looking wobbly so the latter half of the session will depend in Crude and Brent Crude Oil futures stay positive or show some considerable decline.
An increasing number of FOMC members have been talking about a rate hike in April but their leader, the Fed Chair has said something totally opposite in her speech on Tuesday. This could cause a confusing situation in global markets and the overall trend could become more volatile as traders try to decide which way the Fed is going with its rate increase plans.
Major markets are still range bound in their last month’s range and are expected to trade within that range. Volatility will be high. Traders should watch out for resistance near higher levels.
Good luck, enjoy the session.