US stock markets with the SPX Futures contract are down by about 0.6% as investors monitor earnings and how markets react to the recent comments on monetary policy.
The Fed’s Bullard mentioned he would favor a terminal rate of about 5.50% and 5.75% while Bostic sees one more rate hike of about 25 bps before a potential halt of further hikes. Currently a rate ease is expected around November and December with higher probabilities which pressures markets as the easing projection moved from July to November.
Mixed and weakening earnings reports seemingly are another bearish factor to conclude into the current more likely bearish biased market structure while depending on the New York trading opening’s auction process, which tends to lean on buying, the market may lift higher by absorption.
The hawkish comments come along with a higher dollar which pressures commodities such as Gold which is down by about 1.6% and Crude oil which fell by about 1.7%. Meanwhile, Bitcoin which rallied recently due to the banking crisis fell by about 4% in the European trading session.
European inflation eased towards 6.9% from 8.5% by the central bank’s efforts to tighten monetary policy with current viewpoints of another rate increase of about 50 bps or 25 bps. The lower inflation read pressured the euro lower by about 0.3% against the dollar in the early trading session.
Looking at the E-mini S&P 500 we can observe some selling and long liquidations around the swing high back from February on the daily interval. Further hawkish remarks might lead the market to cycle down in a bearish rotation while any positive hints towards a dovish projection might lead core buyers to add to positions around VWAP key levels of the Quarterly and Yearly perspective. Another viewpoint to monitor in the short-term perspective is the lower volatility for the month which might surprise a soaring market, depending on economic data or events. Current calculations, which are slightly mixed, might point towards a balanced market behavior as traders could lean on the extremes to conclude a particular bracket area.
The intraday perspective is imbalanced and out of the prior price range. The New York trading session might be able to lead the market back into the previous price range by buying around the swing lows from Monday’s session. However, current bearish calculation would point core sellers to add around the developing VWAP.
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