The US Federal Reserve has a plan in case a temporary rise in inflation suddenly changes to a steady one

by JustForex

The main US stock indices ended Monday’s trading in different directions. Nasdaq became the strongest performer, which jumped by 0.74%. The S&P 500 index also increased by 0.18%, while Dow Jones decreased by 0.25% at the end of the day. The technology sector was the growth leader, but the financial sector, on the contrary, was in the red zone. Investors’ confidence in the further growth of the indices has become stronger, but there are still some worries before the Fed meeting this Wednesday.

On Monday, ECB head Christine Lagarde said that the current monetary policy and stimulus measures in the eurozone should be maintained until a solid economic recovery is established. European indices closed without a single trend on Monday. A lot will depend now on what Jerome Powell will tell at the Fed meeting on Wednesday.

The negotiations to reopen Iranian crude supplies to the market are at a stalemate again, pushing oil prices higher. Last week, OPEC announced that oil reserves are now 25 million barrels less in comparison with the 5-year average. This indicates that oil still has the potential to grow further.

Yesterday, gold fell in the European session, but sharply rebounded in the American session. Silver has a more confident position now. The fundamental picture for the precious metals is still positive, so a significant decline in prices should not be expected.

Asian stock market follows the American one. Japan’s Nikkei index closed Monday’s trading with the increase and continued to rise at the opening of trading on Tuesday. Australia’s ASX200 added 0.92%. The Bank of Japan’s monetary policy decision will be announced on Friday. More than 85% of analysts believe that Japan will not start to roll back the stimulus until 2023, as the economy is still far from pre-pandemic levels. Japan’s GDP decreased by 3.9% in annualized terms. Tokyo will host the Olympic Games next month.

Main market quotes:

S&P 500 (F) 4,255.15 +7.71 (+0.18%)

Dow Jones 34,393.75 -85.85 (-0.25%)

DAX 15,673.64 -19.63 (-0.13%)

FTSE 100 7,146.68 +12.62 (+0.18%)

USD Index 90.51 -0.04 (-0.05%)

• – Australia Monetary Policy Meeting at 04:30 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – UK BOE Governor Andrew Bailey Speaks at 15:15 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.