Global stocks hit record highs as Fed rate cut bets grow: DAX, AUD/USD and copper in focus
Global equities surged to fresh records, led by Wall Street and Asia, as traders bet on Fed easing. Meanwhile, the DAX 40 faces resistance, AUD/USD eyes its July peak, and copper consolidates below one-month highs.
Overnight summary
Global equities extended their rally, with the Dow Jones, S&P 500, and Nasdaq 100 all closing at record highs and Asian markets echoing the strength. Taiwan’s benchmark hit an all-time peak, Japan’s Nikkei 225 rebounded toward recent records, and solid gains were also seen across South Korea, Hong Kong, and mainland China. In Europe investors embraced risk assets, buoyed by optimism over central bank support.
Attention remains firmly on the Federal Reserve (Fed) as markets anticipate policy easing at the 17 September meeting amid ongoing labour market weakness. While traders largely expect at least a quarter-point rate cut, the outlook hinges on inflation data due Thursday. Strong readings could revive stagflation concerns and complicate the Fed’s trajectory, though markets are currently pricing in 66 basis points (bp) of cuts by year-end.
Meanwhile, commodities reflected broader geopolitical tensions: gold steadied after recent record highs, crude oil climbed following Israel’s strike on Hamas leadership, and NATO forces scrambled air defences after Russian drone attacks on Ukraine.
DAX 40 rejected by resistance
The DAX 40 is swiftly coming off its mid-to-late July and late August resistance area at 23,882 - 23,978.
The 4 July low at 23,703 represents a possible downside target level, provided the resistance zone continues to cap as it did last week. Further down lies Tuesday's low at 23,634.
DAX 40 daily candlestick chart
AUD/USD rally resumes
AUD/USD's recovery from its $0.6415 22 August low has taken it close to its $0.6625 July peak by rising to $0.6620 on Tuesday, a level which remains in sight today.
Above the July peak at $0.6625 beckons the March 2024 high at $0.6667.
The cross will remain immediately bid while the mid-August high at $0.6568 holds, together with the early September high at $0.6560.
AUD/USD daily candlestick chart
Copper range trades below one-month high
The copper price has resumed its sideways trading range, having come off last week's $4.6745 one-month high.
Were it to be overcome, the 200-day simple moving average (SMA) at $4.7719 would probably be in the frame.
Minor support is seen at the 7 September $4.5290 low, a fall through which may engage the $4.5000 region.
Copper daily candlestick chart
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