Major Assets Await FOMC Meeting Results
The US Federal Reserve is the most-watched government agency in the trading market these days, with investors seeing a lot of the Feds in the news lately. And so they brace for yet another wave of news relating to them today. This day will mark the release of the Federal Open Market Committee(FOMC) minutes, the most important economic event that will enlighten those who are still in the dark about the US Federal Reserve’s plan to taper its $85-billion a month bonds-buying program. Market analysts predict that Fed tapering is slated as early as September, or in December.
As traders await the release of the Fed minutes, traders are seeing less risky behaviors which had major assets heading for various directions. Investors are also adapting a cautious approach when it comes to trading.
The news of impending Fed tapering proved as a burden to traders in Asia, as the Asian stocks fell for a 5th consecutive day. The Japanese Nikkei 225 fell 0.28% despite statements from the Bank of Japan (BoJ) Governor Haruhiko Kuroda on additional stimulus measures. Hong Kong’s Hang Seng Index is still on its 8th day losing streak, plunging 1.12%. The Chinese Shanghai Composite Index was 0.29% lower than its previous performance as well.
Elsewhere down under, Australia’s S&P/ASX 200 Index is enjoying continued gains by at least 0.41% as its own government heightens talk about further rate cut.
As American traders wait for the results of the meeting, the U.S. stock market is mixed to lower, the somber mood of investors being attributed to the uncertainty regarding the future of the bank’s stimulus program.
Similarly in the Eurozone, European stocks have been trading in the lows, with major investors being cautious and waiting for statements from the Federal Reserve.
Even with the better-than-expected home sales data from the US, the S&P 500 and Dow Jones Industrial Average are down today. Until the release of the FOMC minutes, traders may expect US indices to go down further if news about the stimulus program remains bleak as the trading day ensues.
The commodities market suffered losses as precious metals lost some of its luster in their safe haven status, with the USD making tentative gains ahead of the FOMC minutes release further in the day. Gold was down by 0.36%, with silver following suit and falling by 0.31%.
Crude Oil enjoyed previous session gains, however briefly, suffering an eventual loss of 0.25% as investors position themselves to a more careful stance as they await the FOMC meeting results. With the USD gaining traction, Natural Gas also dipped by 0.52%.
Moreover, traders should expect volatile trading with crude oil binary options market, as two exporting posts in Libya (Zuetina and Hariga) are being prepared to reopen and resume its operations.
The Asian trading saw the USD generally higher, rebounding from a series of lows seen in previous trading days due to Germany’s improving economic outlook. A six-month high was enough for the Euro, as it remained unchanged against the USD on today’s trading.
The USD/JPY trading pair was 0.19% higher, with the AUD retreating by 0.40% against the USD and 0.27% against the CAD.
The weakening dollar had the EUR/USD currency pair climbing substantially. And as the Eurozone economy appears to be in recovery, the Euro is expected to go further up. The GBP plunged and is trading at 1.5663 ahead of the FOMC minutes, and the GBP/USP pair is expected to remain strong as data from Britain supports economic recovery.
Major Assets Await FOMC Meeting Results,