S&P500 witnessed significant gains on Tuesday amid a cheerful market mood. While the returns on US government
continued their downside journey amid chatters over a further slowdown in inflation as economic activities and demand for durable goods will hit in the upcoming festive season. The 10-year US Treasury yields have dropped to 3.76%.The risk-perceived currencies have gained traction in the current scenario, however, the optimism could get faded as the release of the United States Durable Goods Orders and the Federal Open Market Committee could infusein the global markets.
On Thursday, the release of the FOMC minutes will provide detailed reasoning behind the announcement of the fourth consecutive 75 basis points rate hike. To combat mounting inflation, the Federal Reserve is continuously hiking interest rates. Exhaustion in the inflation pressures has been witnessed by the market participants. The headline inflation has already lowered to 7.7% from the peak of 9.1% and more rate hikes by the Federal Reserve would keep the inflation rate in check.
On Tuesday, Canada’s Retail Sales data dropped sharply by 0.5% vs. an expansion of 0.4% reported earlier. This indicates a sheer slowdown in consumer spending, which may add to the downside filters of the price rise index. Going forward, the speech from Bank of Canada Governor Tiff Macklem will remain in focus. The Bank of Canada Governor is expected to provide interest rate guidance and inflation projections to fade anxiety among market participants.
Meanwhile, the Relative Strength Index has failed to sustain above the bullish range of 60.00-80.00, which indicates that investors are capitalizing rallies for adding shorts.