Nasdaq 100, NDX, Fed, Powell, US Dollar, Japan, JPY- Talking Points
- The Nasdaq 100 shakes off negativity with another up day
- APAC equities were mixed with Japan's GDP not so bad
- Powell's comments helped turn currencies around
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The Nasdaq led Wall Street higher as it put aside Fed Chair Jerome Powell pumping up the hawkish mantra and focused on positive data to finish the cash session with solid gains.
The Nasdaq ended with a 2.76% rally, although futures are pointing to a soft start to the upcoming day session. Chinese and Hong Kong equities went a bit lower, but all other APAC indices are in the green.
US retail sales were a small miss at 0.9% for April instead of 1.0% anticipated. Industrial production rose by 1.1% for the same month instead of 0.5% forecast. Capacity utilisation was a small beat.
Federal Reserve Chair Jerome Powell upped the ante in the inflation fighting stakes with his comments, saying“what we need to see is inflation coming down in a clear and convincing way, and we're going to keep pushing until we see that.”
In terms of rate hikes, he went on further to say,“If that involves moving past broadly understood levels of 'neutral,' we won't hesitate at all to do that.”
Meanwhile, Japanese data showed GDP contracted less than expected with the annualised seasonally adjusted first quarter number coming in at -1.0% against -1.8% forecast.
This comes on the back of the approval yesterday by the government of a stimulatory extra budget worth JPY 2.7 trillion (USD 20.9 billion).
The above factors played some role in currency markets reversing the previous 24-hours trading in the Asian session today. Most notably, the US Dollar and Japanese Yen appreciated, while the Aussie and Kiwi went backwards.
Treasury yields have eased so far today after moving north in the US session in a bear flattening move, where the yields near the front of the curve rise faster than the backend.
Gold is softer, trading near US$ 1,810. Crude oil has also backed off with the WTI futures contract near US$ 113.30 and the Brent contract around US$ 112.30 at the time of going to print.
Today, there will be CPI data for the UK, Euro zone and Canada due out before the US will see MBA mortgage application, housing starts and building permit numbers.
The full economic calendar can be viewed here.
NASDAQ 100 Technical Analysis
There are a series of descending trend lines above and below the price which may suggest a bear market is unfolding.
The snap move below 12700 went through a previous low and one of the descending trend lines. That might now be an area of resistance just above 12700 as there is a topside descending trend line near there.
Support could be at the recent low of 11689 or the at the low trend line, currently at 11200.
Chart created in TradingView
--- Written by Daniel McCarthy, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter
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