Market set-up for December 1: Key things to know
The US Fed Chairman Jerome Powell unleashed an inner hawk on Tuesday. He emphasized that the Fed's test for inflation has been met.
The US Fed Chairman Jerome Powell unleashed an inner hawk on Tuesday. He emphasized that the Fed's test for inflation has been met. Secondly, it is time to retire "transitory" regarding inflation and the threat of persistently higher inflation has grown.
About the labor market, Powell said, "We are going to need a long expansion and for that we need price stability. Inflation is a risk to that".
These are clearly hawkish comments. So what do his comments mean?
Precisely, they mean a faster pace of taper, a faster finish to the entire taper programme and then earlier liftoff as far as rate hikes are concerned.
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The other thing is that it reduces the extent to which the taper decision is now data dependent. Markets reacted - equities lost 1.5 percent to 2 percent, oil sold off 4 percent or so and yields flattened a bit more.
For the markets here, on a closing basis the Nifty made its lowest close of this fall. The relative strength index (RSI) is down, fell to around 31. It was big volume day, a bit of a selling climax? Maybe the Indian market is due for a bounce.
The problem though is complicated by the global picture and the question is this - can there be a durable bounce if Wall Street is starting its own correction?
Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details.
Catch all market updates here.
(Edited by : Anshul)
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