There was no pre-Fed reticence on behalf of the Dow Jones – not yet, anyway – with the index attempting to mount a rebound.
Borrowing some energy from the European markets, which spent much of Wednesday celebrating the news that Italy and the EU had reached a budget agreement, the Dow Jones shot up by 200 points as the bell rang on Wall Street. That allowed the index to put some distance between it and Tuesday’s lows, the Dow now lurking just under 23900.
Yet, being realistic, the Dow’s open means very little. How it performs, likely for rest of the week, is going to be dependent on Wednesday night’s Fed statement. Jerome Powell and co. are still widely expected to hike rates for a 4th time this year, though a measure of doubt hangs over that eventuality. Less known is what tone the central bank will strike for 2019, with analysts anticipating dovishness in light of slowing growth, under control US inflation and, well, Powell’s own about face in November.
Considering this, the dollar didn’t have a great Wednesday. Against the pound it dipped 0.2%, while it shed 0.3% against the yen and 0.7% against the euro, the latter benefiting from the Italy/EU resolution.
The single currency’s growth limited the gains in the eurozone, with the DAX and CAC up just 0.3% and 0.4% respectively, despite the region’s good news. As for the FTSE, its recovering commodity stocks, alongside Glaxo's (LON:GSK) surge, allowed it to climb 50-plus points.
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