The next meeting of the Fed will take place today
Top daily news
Low activity remains on the world markets. Investors are awaiting a meeting of the US Federal Reserve and statements on the reduction of the volume of redemption of US government bonds. Now it is $ 120 billion a month. The Fed's rate hike (+ 0.25%) is not expected.
Forex news
| Currency Pair | Change |
| EUR USD | -0.02% |
| GBP USD | +0.26% |
| USD JPY | -0.09% |
| AUD USD | +0.18% |
On Tuesday, the US dollar index was almost unchanged for the 2nd day in a row. Investors are awaiting the outcome of the Fed meeting, which will take place today, June 16. Inflation in the US in May this year reached 5% in annual terms, which is the highest since August 2008. It far exceeded the Fed's target of 2% and the discount rate of 0.25%. Market participants hope for any statements by the American regulator about tightening monetary policy - raising the rate or reducing the volume of bond redemptions (quantitative easing). Now it is $ 120 billion a month. Their confidence is supported by good data on the US labor market for May, published 2 weeks ago. Yesterday's economic indicators may also push the Fed to tighten monetary policy. The strong rise in inflation reduced retail sales in May by 1.3% compared to April. Producer price index in annual terms reached 6.6%, which is the highest since November 2020. This could be a risk to further economic growth. The yield on U. S. 10-Year Treasury bonds today rose slightly to 1.5% per annum from 1.45% on Friday. Investors are still not 100% sure about the future tightening of the Fed's policy. At the same time, the US dollar is supported by the weakening of the euro and the Japanese yen. European Central Bank has already announced that it will continue emission and soft monetary policy. The Bank of Japan is expected to make a similar statement at its June 18 meeting.
Stock market news
| Indices | Change |
| Dow Jones Index | -0.27% |
| S&P 500 | -0.2% |
| Nasdaq | 100 -0.71% |
| US Dollar Index | -0.03% |
On Tuesday, the change in the US stock indexes S & P 500 and Nasdaq renewed their all-time highs but then declined by the end of the day. Since the beginning of the year, their growth is already 13.7% and 9.5%, respectively. Tightening of the Fed's monetary policy may cause a correction in the stock market. Yesterday, amid rising oil prices, shares of Exxon Mobil Corp (+ 3.6%) and other companies in the oil and gas sector went up. In addition to the Fed meeting, today in the US there will be data on the residential real estate market for May: Building Permits and Housing Starts. The forecast is positive. Talks between the presidents of the United States and Russia will also take place today. Their results may affect the commodity and foreign exchange markets.
Commodity market news
| Commodities | Change |
| WTI Crude | +0.55% |
| Brent Crude Oil | +0.47% |
| Copper | -0.32% |
World oil prices have been growing today for the 5th day in a row. The independent American Petroleum Institute announced a decline in US oil reserves for the week by 8.5 million barrels. Their decline has been observed for the 4th week in a row. Official data on stocks will be released today. The International Energy Agency expects global oil demand to reach pre-covid levels in the second half of this year. Against this background, WTI and Brent quotes have already reached their maximum since October 2018. Representatives of companies - large oil traders believe that by the end of this year oil will be traded in the range of $ 70-80 per barrel. However, it is worth mentioning that oil traders are often very optimistic.
Gold market news
| Metals | Change |
| Gold | +0.19% |
| Silver/US Dollar | +0.63% |
Gold quotes fell on Tuesday for the third time in a row on the back of the rise in the US dollar index. Today, their change is minimal, as investors are waiting for the results of the Fed meeting. The precious metals are supported by the low yield on the U. S. 10-Year Treasury. Taking into account real, American inflation, it is negative. Copper quotes are declining today for the second day in a row against the backdrop of China's plans to limit the growth of world prices for non-ferrous metals through the sale of copper, aluminum, and zinc. In addition, the announcement of the Canadian company Ivanhoe Mines about the commencement of the Kamoa-Kakula copper mine in Congo was a negative factor.
Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.
Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.
Author
Dmitry Lukashov
IFC Markets
Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.
