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AUD/USD dips below 0.6600 following RBA’s decision

AUD/USD dips below 0.6600 following RBA’s decision

The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.

AUD/USD News

EUR/USD edges lower to near 1.0750 after hawkish remarks from a Fed official

EUR/USD edges lower to near 1.0750 after hawkish remarks from a Fed official

EUR/USD extends its losses for the second successive session, trading around 1.0750 during the Asian session on Wednesday. The US Dollar gains ground due to the expectations of the Federal Reserve’s prolonging higher interest rates.

EUR/USD News

Gold wanes as US Dollar soars, unfazed by lower US yields

Gold wanes as US Dollar soars, unfazed by lower US yields

Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.

Gold News

FTX files consensus-based plan of reorganization, awaits bankruptcy court approval

FTX files consensus-based plan of reorganization, awaits bankruptcy court approval

FTX has filed a consensus-based plan for its reorganization, coming almost two years after the now defunct FTX filed for Chapter 11 Bankruptcy Protection in the District of Delaware.

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Living vicariously through rate cut expectations

Living vicariously through rate cut expectations

U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year. 

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S&P 500

The Standard & Poor's 500, abbreviated as the S&P 500, or just "the S&P” is a market value-weighted index of 500 large companies having common stock listed on the New York Stock Exchange (NYSE). It is seen as a leading indicator of U.S. equities and generally perceived as the most representative.

The S&P 500 stock market index, maintained by S&P Dow Jones Indices, comprises exactly 505 common stocks – including two share classes of stock from 5 of its component companies – issued by 500 large-cap companies and traded on American stock exchanges (including the 30 companies that compose the Dow Jones Industrial Average, DJIA) and covers about 80% of the American equity market by capitalization. The index is weighted by free-float market capitalization, so more valuable companies account for relatively more of the index. The index constituents and the constituent weights are updated regularly using rules published by S&P Dow Jones Indices.

The companies of the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor's following selection criteria including market size, liquidity and industry grouping.

Over time, the S&P 500 can be used as a benchmark for the economy.


HISTORIC HIGHS AND LOWS FOR S&P 500

  • All-time records: Max: 3397 on 20/02/2020 - Min: 4.4 on 05/1932
  • Last 5 years: Max: 3397 on 20/02/2020 - Min: 1807 on 11/02/2016

* Data as of February 2020


ASSETS THAT INFLUENCE THE S&P 500 THE MOST

  • Currencies: USD.
  • Commodities: Oil and Gold.
  • Bonds: T-Bond (Treasury bond is a marketable, fixed-interest U.S. government debt security).

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE THE S&P 500

Since the S&P 500 is a benchmark of American stocks, what will impact its value is related to all those decisions and figures that affect the results of big companies in the USA. That is, among others:

  • Economic indicators of inflation (CPI, PPI,...), consumer confidence (as Michigan Consumer Confidence Index), growth (GDP), employment (Non Farm Payrolls) and salaries (Average Hourly Wages)
  • interest rates decided by the Federal Reserve System, which is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. Jerome Powell is the 16th Chair of the Federal Reserve, serving in that office since February 2018. He was nominated to the Fed Chair position by former President Donald Trump and confirmed by the United States Senate.
  • Fiscal policy, trade deals, business laws decided by the US administration (Joe Biden), but also by the US Treasury Department (Janet Yellen) and the US Department of Commerce (Wynn Coggins). The US Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and manage the U.S. Government’s finances and resources effectively. The US Department of Commerce is an executive department of the federal government concerned with promoting economic growth. Among its tasks are gathering economic and demographic data for business and government decision-making, and helping to set industrial standards
  • Energy prices such as electricity, oil, etc...because they have impact on production costs for those companies that are part of the S&P500.