The actions finished flat on Wednesday, making the earlier gains before the Federal Open Market Committee (FOMC). One day earlier, I mentioned that an ideal scenario would have been a decrease in the least 5,965. Although we did not achieve this yesterday, nothing has happened to invalidate expectations for more decline. Friday is now essential, in particular the expiration of options and the positioning of the current index. In particular, we also closed below the 10 -day EMA for the third time in four days.
It should be noted that once we move last Friday, the support levels due to gamma positioning in the S&P 500 will stop around 5,905, coinciding with the position of the JPM collar. Given this alignment, this area could act as a magnet for the index next week.
(Barcharts)
The Fed has not announced any change of title. However, below the surface, they have downgraded their growth forecasts, increased expectations for and in 2025, and reduces the reduced rate drops for 2026 and 2027. More critical, taking into account the forecasts of the market and the Fed, it seems more and more clear for an economic crisis – that the era of 0% of interest rates is finished, pointing to the end of the curve.
The day ended the mainly unchanged day, but in particular, it went from approximately 4.86-4.87% before the Fed announcement to end at around 4.89-4.90%. Given the projection of the Fed of a long-term night rate of 3%, it is confusing why the rate of 30 years is only negotiated by 55 base points above the bill. This narrow propagation seems unusual and implies that long -term yields must probably move significantly.
I am not entirely sure of the accuracy of this movement, because it seems quite unusual, and it could potentially reverse by Friday. However, it should be noted that we have seen a significant increase in inflation exchange rates to 1 year and 2 years, with doping from one year to 3.55% and the 2 -year increase to 3.19%. Interestingly, this increase did not extend to the exchange of inflation to 5 years. I am not sure if the market anticipates a sudden peak or something else …
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