Stock markets are a little flat on Wednesday as investors await minutes from the May FOMC meeting.

I'm not sure what exactly investors are holding out for. A lot has changed in the markets over the last few weeks and we've had a lot of Fed commentary in that time that is arguably more relevant than almost anything we can take from the minutes.

That said, this is nothing new and investors are always wary of what could happen. Especially when market conditions are as volatile and uncertain as they are. There is no shortage of anxiety in the markets and the minutes could potentially feed into that.

We've seen interest rate expectations pare back a little in recent weeks as economic fears have become more prominent. The central bank still expects to avoid a recession, which may be referenced in the minutes, but investors are becoming less confident as the cost of living squeezes household budgets.

ECB seemingly united on July and September hikes

We've heard from numerous ECB policymakers today and it's clear that they are united in their desire to start raising rates in July and again probably in September. There is some desire to perhaps move faster it seems but broadly speaking, there's clearly widespread agreement.

It still seems quite strange how direct they are being about raising interest rates and when especially when talking about September which is four months away. One thing that's been clear over the last year is how horrible policymakers have been at anticipating things months in advance. I'm not sure what has made them so confident now.

Risks remain tilted to the upside in oil

Oil prices are continuing to consolidate around the upper end of their trading range over the last couple of months. Concerns about Covid cases in Beijing and global growth are continuing to prevent a much larger rally in oil prices as a result of the undersupply in the market, a potential EU ban on Russian imports and the reopening in Shanghai.

We're seeing gains again today of around 1% but these are still relatively small and represent a slowing of momentum in the rally. Risks still remain tilted to the upside, even after the recent moves, but it just may not be as explosive as we've seen at times before. ​

Gold slips ahead of the FOMC minutes

Gold is making small losses ahead of the Fed minutes as the dollar claws back some of the recent declines. There's clearly some nerves around what the minutes will contain which is why we appear to be seeing a little profit-taking.

The yellow metal is seeing some support around $1,850 after peaking near $1,870 on Tuesday. Assuming the minutes don't contain anything too shocking, we could see it continue to push higher as economic fears push investors back towards safe-havens.

Bitcoin disconnected from broader markets?

Nothing much has changed as far as bitcoin price action is concerned in recent weeks. It continues to be choppy around $30,000 and isn't really picking up any momentum in either direction. It remains a mild concern that there isn't much dip-buying appetite even during periods of improved sentiment in the markets but perhaps we're seeing a bit of a brief disconnect between crypto and the rest of the market.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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