Markets Reduce Losses But Remain Red After Cautious Fed And BoE Statements

Markets Reduce Losses But Remain Red After Cautious Fed And BoE Statements

Spreadex  | Sep 18, 2020 05:47

Cooling their losses slightly, the markets still couldn’t shake the niggling feeling that the Fed let them down on Wednesday night.

Retreating 105 points – roughly a third of the forecast decline earlier in the day – the Dow Jones retreated further from 28000 on Thursday afternoon, a level that it has repeatedly failed to close above in the past week or so. This slide came despite a dovish Fed yesterday evening, one that even revised its forecasts for US GDP this year from -6.5% to -3.7%.

In terms of the afternoon’s data, the weekly jobless claims reading came in at 860k. That’s worse than the 825k forecast, but is the 3rd 6, rather than 7, digit figure in a row.

Elsewhere, the DAX dipped 0.3% to sit the wrong side of 13200, while the CAC dropped half a percent, sinking below 5050.

Echoing the Federal Reserve by keeping interest rates near zero, the Bank of England warned of an ‘unusually uncertain’ recovery during the month’s MPC meeting, prompting analysts to speculate the QE programme could be expanded in November if the UK’s comeback starts to slow down. This did little for the FTSE or pound, however; the UK index followed its peers in reducing its losses, but still fell 0.4%, while sterling was up 0.1% against the dollar but down the same amount against the euro.

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