Fed minutes send markets wild, attention turns to Europe & UK

February 22, 2018

Huge volatility in early morning trading as the US Fed Reserve release the minutes of the last interest rate meeting.

Once again, the Dow bore the brunt of the market volatility stemming from the release of the Fed Reserve meeting minutes. After starting the session reasonably flat, it steadily climbed in the lead up to the release. Upon release, it jumped around 260 points to hit session highs of 25,260.40. From that point on however, the Dow plummeted around 530 points to reach session lows of 24,708.00. It has since come off those lows slightly, trading at 24,745.30. The Dax followed in similar fashion, but less pronounced. It spiked around 80 points to session highs of 12511.22 around the same time the Dow spiked, but it also followed the Dow’s tumble. The Dax proceeded to drop around 120 points to session lows of 12,394.82, which is where it currently sits.

Currencies seemed to follow the lead of stocks. The EUR/USD pair was steady throughout the trading session, then spiked after the release of the minutes to session highs of $1.23597. It then dropped to session lows of $1.22766 which is where it is presently trading. There was more volatility for the GBP/USD pair in the lead up to the Fed minutes. However, like everything else seemed to do, it spiked to session highs of $1.40082. It gave up all of those gains as it fell over a cent to session lows of $1.39023. It has come off those lows slightly, currently trading at $1.39087.

Turning to today and there are two significant events coming up. The first is the Second Estimate GDP from the UK. It is vital because it indicates economic growth in the UK economy. The second significant event is the release of the ECB Monetary Policy Meeting Accounts. This is the European version of the Fed Reserve minutes. While it is not expected to cause as much volatility as the Fed minutes, the ECB meeting accounts does have the potential to still move markets in a big way. Other data set for release today includes:

NZ – Credit Card Spending, Retail Sales

Europe – French Final CPI, German Ifo Business Climate, Belgian NBB Business Climate

Canada – Retail & Core Retail Sales, Corporate Profits

UK – Prelim Business Investment, Index of Services, CBI Realised Sales

US – Unemployment Claims, CB Leading Index, Natural Gas Storage, Crude Oil Inventories, FOMC Members Randal Quarles, William Dudley and Raphael Bostic are set to speak


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