16 Jun

Volatility in financial markets declined as investors await the Federal Reserve meeting

June 16, 2021

by JustForex

The US stock market closed with a decrease at the end of the day. The technology sector, as well as the consumer goods sector, became the leaders of the decline. Note that these sectors were the leaders 2 days ago. It proves that distribution of funds between sectors is carried out in a planned way, when some sectors are growing and others are falling down, and after a few days the picture is the opposite. And more than half of the deals are carried out by trading algorithms. Today, all the attention of investors is focused on the FOMC meeting and Jerome Powell’s press conference. Watch out for the volatility to rise sharply. Analysts expect officials to point out a discussion on the reduction in stimulation measures, but the cuts themselves will not be implemented yet, as the number of jobs is significantly lower than the pre-pandemic level. Therefore, it is more likely that soft monetary policy will remain until August.

European stock indices closed with a rise on Tuesday. Germany’s DAX and Britain’s FTSE increased by 0.36%. The vaccination rate in Europe continues to rise. Europe is expected to reach the marker of 70% of vaccinated adults in July. This state of affairs will undoubtedly have a positive effect on the growth of the eurozone economy. The UK has not yet lifted strong restrictions, the opening of the economy has been postponed until next month. The consumer price index showed that inflation in Foggy Albion increased to 2.1%. Experts believe a figure of 2.5% by the end of this year.

The price of oil is unstoppable. Yesterday, the price of the “black gold” hit its 2-year high again. Today, traders are expecting a report on crude oil inventories, which usually has a significant impact on oil price behavior. Inventory shortages could push the price even higher.

Gold futures remained at the same level. It is very important to monitor the dollar index and Treasury yields now, as gold has an inverse correlation to these instruments. If the monetary policy will be maintained till August, gold is very likely to continue its upward trend. On the other hand, copper prices are declining and are close to good medium-term buying points.

Japan’s Nikkei index decreased by 0.2% and China’s main index, the CSI 300, lost 0.3%. Volatility in Asian indices has declined as investors are wary of any signs of aggressiveness from the US Federal Reserve. There are also slight concerns about the slowdown in China’s economy, this data will be released today. There is another coronavirus outbreak in Australia.

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Main market quotes:

S&P 500 (F) 4,246.59 -8.56 (-0.20%)

Dow Jones 34,299.33 -94.42 (-0.27%)

DAX 15,729.52 +55.88 (+0.36%)

FTSE 100 7,172.48 +25.80 (+0.36%)

USD Index 90.52 -0.00 (-0.01%)

Important events:
  • – UK Consumer Price Index (m/m, y/y) at 09:00 (GMT+3);
  • – China Industrial Production (m/m, y/y) at 10:00 (GMT+3);
  • – China Retail Sales (m/m) at 10:00 (GMT+3);
  • – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
  • – Canada Core CPI (m/m) at 15:30 (GMT+3);
  • – US Building Permits (m/m) at 15:30 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
  • – US FOMC Meeting Minutes Release at 21:00 (GMT+3);
  • – US FOMC Statement at 21:00 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (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.


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