Focus on the Fed as central bank’s policy dominates sentiment

The monetary policy actions of central banks are again dominating changes to market sentiment. The strong dovish steer from the European Central Bank which implies further easing at the December meeting, in addition to an unexpected rate cut from the People’s Bank of China has had a profound impact on markets. The improvement in sentiment was sharp but it will be interesting to see if this momentum can last into the new week. The meeting of the Federal Reserve looms large this week, but that is not the only central bank set to announce. The table of economic announcements layout out the key data releases that you need to be aware of this week, but the Fed is certainly the one key release that traders need to be aware of when setting up for their strategy.

The big impact has come across currency markets with the dollar strengthening sharply. The big question is, how this impacts the outlook across the dollar major pairs and whether this mean there needs to be a reassessment of strategy. There is a key technical analysis of two major forex pairs with the direction of the euro and sterling considered.

Looking at the equity markets, the impact of earnings season seems to be somewhat muted when the big macro news dominates direction. With the central bank announcements continuing this week, it could continue to be the case. We look at the key changes to market outlook and the levels that need to be watched. There is also a technical analysis of two major markets, with the German DAX Xetra and FTSE 100 considered from a medium term perspective.

How have the key commodity and bond markets been impacted by recent events? We take a technical analysis view of Gold and Brent Crude.