More YTD highs for stocks; Strong UK labour market data

Summary:

  • US stocks look to extend rally as 2-day Fed meeting begins

  • DE30 surges to the highest level this year

  • Top 3 charts of the week: DE30, EURUSD, Copper

  • High UK wage growth stands out

  • Six banks plan to issue stablecoins using IBM’s payment network

 

Stock markets bulls across the Atlantic seem to be attempting to front run the Fed, with equities soaring heading into what could be a major event. The FOMC have begun their two day meeting with the policy decision due at 6PM Wednesday, followed 30 minutes later by a press conference with Chair Powell. U-turn in the bank’s policy is arguably the single largest factor behind the sensational recovery rally seen so far this year and investors are seemingly betting on more support tomorrow evening (read our full Fed preview here).

 

Germany is the strongest equity market in Europe today as DE30 surges 1.25% to 11825 points – the highest level since October 2018. Markets liked the ZEW sentiment index that rose to 11 months high and are optimistic ahead of the Fed decision tomorrow. After DE30 crushed 11775 resistance the next levels to watch are psychological 12000 and technical 12100.

 

The top 3 charts this week focuses on the DE30, EURUSD and Copper and can be viewed in more detail here.

 

The most recent figures on the UK labour market have been released earlier than expected, catching some traders off guard with what is a pretty pleasing all round data point. Wages are often the thing to watch here, and a print of +3.4% compared to consensus forecasts of +3.2% represents a solid upside beat. The prior reading was also revised higher to 3.5% from 3.4% previously. In addition the unemployment rate unexpectedly fell to 3.9% and it appears that the labour market is still in remarkably in rude health despite the ongoing calamity surrounding Brexit. In terms of market reaction there has been a little pop higher in the pound, but the markets remain far more concerned with the latest on the Brexit front.

 

Tuesday’s morning has delivered another quite a boring picture of the cryptocurrency market as most of virtual currencies has not managed to produce any major price movements. As a result, the largest cryptocurrency Bitcoin is still trading around the $3957 handle at press time. According to CoinMarketCap, the capitalization of the whole crypto market stands around the $140.5 billion handle whereas the market capitalization of altcoins sits around the $69 billion mark around Tuesday noon. IBM, the US-based top tech company, disclosed its payment network for regulated financial institutions called “IBM Blockchain World Wire” using the Stellar blockchain yesterday. The network is aimed to “optimize and accelerate foreign exchange, cross border payments and remittances”, as the IBM’s press release reports. “Today World Wire has enabled payment locations in 72 countries, with 47 currencies and 44 banking endpoints”, according to the mentioned company’s communique. What’s interesting, IBM said that six international banks (including Banco Bradesco, Bank Busan, and Rizal Commercial Banking Corporation) signed letters of intent to issue stablecoins using the IBM’s payment network.

 

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