Price action in markets has been poor in the past 24 hours. In particular, having broken out to new highs earlier this week, major US equity indices have fallen back into the middle of their recent trading ranges (including both the S&P500 & Nasdaq100).
The ‘upside breakout’, therefore, has been false. That raises a key question at this time: Will those false breakouts be followed by a phase of ongoing near term weakness in equities? OR – will markets attempt, once again, to meaningfully push out to new highs?
Key macro data today includes US building permits and housing starts (for January, released at 1:30pm London time) as well as the Philadelphia Fed business outlook (for February, at 1:30pm). Key events include the minutes of the January ECB’s monetary policy meeting (12:30pm) and a speech from the Fed’s Brainard (1pm).