December Crude Oil and Gasoline are trading weaker at the midsession following an unexpected rise in inventory and a drop in demand. The Energy Information Administration showed crude oil inventory rose by 2.8 million barrels at the end of last week. Traders were looking for a 1.5 million barrel decline. Demand also fell by 3.3%.
Gasoline inventory rose 5.4 million barrels. Traders were looking for a 400,000 barrel increase. Demand also fell unexpectedly by 2.3%.
U.S. equity markets are trading mixed at the midsession ahead of this afternoon’s Fed FOMC announcement. Traders are certain the Fed will leave interest rates at near historically low levels but are unsure what language it will use to announce its future plans. Bullish traders want to hear the Fed will leave interest rates low for an extended period of time.
U.S. Treasury futures are trading better in light trading. Traders want to hear the Fed say it will extend its stimulus program to buyback mortgages until the end of the year. The Fed is walking a tightrope. If they pull the stimulus too early it may curtail the start of the recovery. The market doesn’t want to see the stimulus expanded as this would indicate the economic situation is not improving. It doesn’t want to see the Fed pull the stimulus too early either.
The U.S. Dollar is trading slightly better against most major currencies this morning. Trading is mixed between position evening ahead of this afternoon’s FOMC announcement and profit-taking following yesterday’s surge. Most traders don’t expect the Fed to speak directly about the Dollar, but any hint that rates may rise in the near future is likely to trigger a strong short-covering rally. The September British Pound is posting a gain versus the Dollar because of friendly comments from the Bank of England in its minutes report.
December Gold is mixed to lower because of the weaker Dollar. Traders are waiting to see what the Fed says about its future plans. Anything that boosts the Dollar could send precious metals plunging.
Gasoline inventory rose 5.4 million barrels. Traders were looking for a 400,000 barrel increase. Demand also fell unexpectedly by 2.3%.
U.S. equity markets are trading mixed at the midsession ahead of this afternoon’s Fed FOMC announcement. Traders are certain the Fed will leave interest rates at near historically low levels but are unsure what language it will use to announce its future plans. Bullish traders want to hear the Fed will leave interest rates low for an extended period of time.
U.S. Treasury futures are trading better in light trading. Traders want to hear the Fed say it will extend its stimulus program to buyback mortgages until the end of the year. The Fed is walking a tightrope. If they pull the stimulus too early it may curtail the start of the recovery. The market doesn’t want to see the stimulus expanded as this would indicate the economic situation is not improving. It doesn’t want to see the Fed pull the stimulus too early either.
The U.S. Dollar is trading slightly better against most major currencies this morning. Trading is mixed between position evening ahead of this afternoon’s FOMC announcement and profit-taking following yesterday’s surge. Most traders don’t expect the Fed to speak directly about the Dollar, but any hint that rates may rise in the near future is likely to trigger a strong short-covering rally. The September British Pound is posting a gain versus the Dollar because of friendly comments from the Bank of England in its minutes report.
December Gold is mixed to lower because of the weaker Dollar. Traders are waiting to see what the Fed says about its future plans. Anything that boosts the Dollar could send precious metals plunging.
