Stocks Push Higher Ahead of the Fed – Nasdaq up 1%
US stocks pushed higher in trading yesterday ahead of an anticipated rate cut from the Fed later in the week. Both the Nasdaq and the S&P hit record closes again; the Nasdaq closed up 0.94% at 22,348, the S&P added 0.47% to 6,615, and the Dow finished up 0.11% at 45,883. Empire State Manufacturing data came in worse than expected, pushing both yields and the dollar lower: the 2-year off 1.9 basis points to 3.537%, the 10-year down 2.7 basis points to 4.037%, and the DXY 0.2% lower at 97.36. Oil prices pushed higher again, with Brent up 0.67% to $67.43 and WTI up 0.89% to $63.25 a barrel. Gold again hit record highs on the back of the lower dollar, closing the day up 0.98% at $3,678.99, having topped out at $3,685.39 earlier in the day.
Sterling in Focus as Data Rolls into the Bank of England
It is a big week across financial markets with the key Fed rate decision probably first and foremost in most traders’ minds. However, FX traders feel they may get more bang for their buck in the next few days in the pound, which has some key data due out around the next rate call from the Bank of England. Both employment data and inflation numbers are due out this week on consecutive days ahead of the interest rate decision, and both have the propensity to push Cable and the crosses to fresh levels if they come in significantly off expectations. Employment data is due out later today, with the Unemployment Rate set to remain high at 4.7%. The CPI number is out tomorrow, expected to remain “sticky” at 3.8% year-on-year, with these numbers probably locking in a hold from the MPC on Thursday. Any big deviations on the prints, although unlikely to affect this week’s rate call, could affect future moves, and they are likely to be reflected in the currency.
Data in Focus for Traders Today
Traders will be focusing on some key data releases in the sessions today, ahead of a raft of crucial central bank interest rate decisions in the coming days. There is little on the schedule in the Asian session, although markets are expected to push higher after another strong day on Wall Street. The European session will see a strong focus on UK markets with employment numbers due out early in the session. The Claimant Count (exp. 15.3k), Average Earnings Index (exp. 4.7% 3m/y), and the Unemployment Rate (exp. 4.7%) are expected to see moves in sterling ahead of Thursday’s Bank of England rate call. The New York session sees a big data hit early in the day, with US Retail Sales (exp. 0.2% m/m) and Core Retail Sales (exp. 0.4% m/m) releases out alongside Canadian CPI (exp. 0.0% m/m) and Trimmed Mean CPI (exp. 3.0% y/y) data.
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