S&P 500 & FTSE Face FOMC, BoE; DAX Still Trying To Mend Itself

Talking Points:

S&P 500

In the week ahead, all eyes will be on the Fed on Wednesday, as the world’s largest central bank is expected to raise rates by 25 bps. With a raise expected, attention will be on sentiment expressed by the Fed towards the expected flight path for rates moving forward. Other key data points will be largely overshadowed by the Fed, but recently we have seen index futures react to data releases more so than any time in recent memory. On Friday, we have Durable Goods Orders for February. For details on all scheduled data releases, check out the economic calendar.

The S&P is still in limbo between possibly carving out a major lower-high or working its way back to fresh record levels. As discussed on Friday, keep an eye on the Dow Jones as its symmetrical triangle is nearly completed and ready for a breakout. Which way it breaks could go a long way towards determining the next big move for the broader market.

S&P 500: Daily

DAX

In terms of ‘high’ impact data, there is only one release next week. The ZEW survey for both Germany and the Euro-zone will be released at 10 GMT time on Tuesday. Traders will continue to keep an eye on the euro, although right now with it largely range-bound its impact is likely to be minimal in the week ahead. Watch how U.S. markets react to the Fed on Wednesday, as a carry-over reaction could be seen on Thursday’s open.

The DAX is in recovery mode, but the general price action isn’t very powerful on the upside. It is lagging U.S. markets by a solid margin and depending on how things shape up there and impact risk, the strength of the S&P 500 will play a big part in whether the German benchmark can continue to bounce. The DAX is still at risk of carving out a lower-high from the bounce in February, which could cause downside pressure to be reasserted again soon. If the U.S. maintains a bid, though, look for the DAX to continue limping higher.