Overnight on Wall Street: Thursday 28 January 2021

Equity markets

US and European Equity markets suffered a considerable drop last night with the S&P 500 (US500) posting its worst session since October and European markets their worst session of the year.

The FOMC policy statement overnight struck a less dovish tone than investors had hoped for, while the central bank kept benchmark interest rates unchanged at their near-zero level, a change of language indicated that it is unlikely further stimulatory measures will be taken on top of the current regime.

NASDAQ listed giants Facebook (FB) and Tesla (TSLA) also disappointed with reported results helping to drag down the NASDAQ 2.6% making it the worst performing major US Index of the day.

Source: Google Finance

On the back of this, Asian and Australian markets are looking to open substantially down, with the ASX200 down almost 1.5% at the open.

Currency markets 

The US dollar Index rallied 0.5% overnight with the release of the FOMC policy statement, as a result major pairs weakened against the greenback with AUDUSD falling over 1% to be the worst performing major pair finishing decisively below the 0.77 level that had been acting as support.

Source: GO MT4

Oil

Despite a much larger draw on crude oil inventories overnight crude oil had a quiet session. After comments from Jerome Powell overnight oil traders are wary that full recovery is some way off and with it oil demand. US crude has found major resistance around the $54 a barrel level.

Source: GO MT4

Bitcoin

Bitcoin (BTCUSD) continued its recent down trend with the price briefly dipping below the important 30,000 level before rebounding slightly.

This level is seen as psychologically important to Bitcoin fans and how it holds in the next few sessions should be indicative of near term price trends in the Cryptocurrency.

US dollar strength and the seeming rotation of momentum traders into different assets are causing a headwind on the price.

Source: GO MT4