Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Opening Bell: U.S. Futures Edge Higher; Oil Gains; Dollar Weaker

Published 09/16/2020, 09:03 AM
Updated 07/09/2023, 06:31 AM
  • US futures point to extended rally, after bottoming on intra-day chart
  • Oil prices rise after inventories show unexpected drawdown
  • Dollar remains weak
  • Key Events

    US contracts pointed to a higher open on Wednesday and European stocks edged higher ahead of the FOMC policy meeting today.

    The Fed is not expected to change interest rates at its first meeting since it outlined its new framework for economic policy. But, the market is looking for additional details on how long the average inflation figure will be permitted to remain above 2% before it will feel obligated to raise rates.

    Global Financial Affairs

    Investors cautiously tweaked positions to place global markets in a holding pattern as they wait for the Fed's policy announcement.

    Markets are hoping for some improvement in the central bank’s economic forecasts, as well as reaffirmation of market support while we await additional coronavirus relief packages from US lawmakers, in order to justify buying the biggest dip in months.

    All four major US contracts, Dow, S&P, NASDAQ and Russell 2000, were up this morning, with those on the NASDAQ 100 returning to outperformance (+1.4%) having led the selloff.

    NASDAQ Futures 240

    The contract on the NASDAQ 100 is attempting to double-bottom the 4-hour chart.

    The Stoxx Europe 600 Index advanced 0.5%, extending its rally for the fourth straight day on the back of strong results from the retail sector—Zara-owner Inditex (MC:ITX) announced a return to quarterly profit this morning and yesterday H&M (OTC:HNNMY)'s results exceeded expectations. 

    Stoxx Daily

    The pan-European index inched toward the top of an ascending channel, a pattern that demonstrates that buyers are gaining incremental footholds into seller’s territory.

    Asia was mixed with tech stocks leading Australia’s ASX 200 (+1%) to a weekly high—outperforming the region. China’s Shanghai Composite (-0.4%) snapped a three-day rally, weighed down by consumer and healthcare shares after experts voiced concerns over the safety of drugs used in experimental coronavirus vaccines in the country.

    American equities managed a higher close Tuesday, as tech shares offset a late selloff in financials, including JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Bank of America (NYSE:BAC). The S&P 500 Index climbed for the third straight day, with communication services, real estate, and consumer discretionary shares outperforming.

    Yields, including for the 10-year benchmark Treasury, have been ranging for the third day, but the dollar returned to a slide.

    US Dollar Index Daily

    While the dollar may have been dropping within a falling channel, its trading pattern since late-July allows for a bottom in the shape of a H&S.

    Dollar weakness boosted gold for the third day, after it may have completed a bullish pennant (blue).

    Gold Daily

    Alternatively, the precious metal may be forming a third consecutive bearish flag—resisted by the rising channel’s bottom. Only a strong move over $2,000 will clear this self-contradictory pattern. Momentum and price-based indicators seem to be in favor of the bullish pennant scenario.

    Bitcoin climbed for the third day in a row, blowing out what would have been a bearish pennant—turning it bullish—following a H&S top. It would be interesting to see which pattern’s dynamics will win, the bearish H&S or the now-bullish pennant.

    Bitcoin Daily

    The cryptocurrency's H&S is larger and therefore has more vested interest, but on the other hand its minimum implied target has already been achieved on the first day of the solid downside breakout. Note, the 100 DMA supports the pennant, while the 50 DMA adds resistance to the H&S.

    West Texas crude oil extended gains after a surprise American stockpiles drop.

    Oil Daily

    Up Ahead

    • Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
    • Bank of Japan, Bank Indonesia and Bank of England policy decisions due Thursday.
    • Friday sees quadruple witching—the quarterly expiration of futures and options on indexes and stocks—in US markets

    Market Moves


    • Futures on the S&P 500 Index increased 0.3%.
    • The Stoxx Europe 600 Index gained 0.3%.
    • Germany’s DAX Index advanced 0.2%.
    • The MSCI Asia Pacific Index advanced 0.4%.


    • The Dollar Index declined 0.2% to 92.94.
    • The euro was little changed at $1.1852.
    • The Japanese yen strengthened 0.1% to 105.35 per dollar.
    • The British pound was little changed at $1.2886.


    • The yield on 10-year Treasuries dipped less than one basis point to 0.67%.
    • Germany’s 10-year yield dipped one basis point to -0.49%.
    • Britain’s 10-year yield declined one basis point to 0.206%.


    • West Texas Intermediate crude increased 2.1% to $39.10 a barrel.
    • Gold strengthened 0.5% to $1,963.98 an ounce.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.