Home Forex Wall Street closes lower as Fed holds rates

Wall Street closes lower as Fed holds rates

by Paul
Wall Street

US indices close lower after the Fed signalled no change in rates

US indices pared early gains to close lower after the Fed held rates and signalled they would remain low for some time.

The UK is likely to leave the EU on January 31 with an agreement, likely avoiding a rough Brexit, as the European Parliament approved the Boris Johnson’s Brexit deal.

The Bank of England is also expected to keep rates unchanged at today’s meeting.

The US30 gave back early gains and closed lower amid talk that airlines were seriously scaling back services to mainland China as the coronavirus situation worsens.

The 55-day moving average at 28,417 remains intact and has supported prices since October 10.

Chairman Powell said the Fed is not comfortable with inflation consistently running below its 2% target while asset valuations are elevated, but not extreme. US Q4 GDP growth is seen unchanged at +2.1% q/q annualized.

The Germany30 index was little changed at the close yesterday after attempting to push higher in early trading.

The index is above the 55-day moving average at 13,283.

Euro-zone confidence indicators are seen mixed this month, according to the latest surveys of economists. Industrial confidence is seen rising to -8.7 from -9.3 while services sentiment probably dipped to 11.2 from 11.4.

The UK100 index rose after the Brexit deal was ratified by the European Parliament, but gave back those gains into a weak close.

The index is above the 100-day moving average at 7,376, which has supported prices since December 13.

The Bank of England is expected to keep its benchmark interest rate unchanged at 0.75%, with no adjustment to its asset purchase facility either. Surveys suggest three of the committee members could vote for a cut. Market pricing assigns only a 45% chance of such an outcome.

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