By IFCMarkets
Trump expected to announce next Federal Reserve chair
US stocks closed higher on Wednesday after upbeat Federal Reserve statement. The dollar strengthened: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.3% to 94.795. The S&P 500 added 0.2% to 2579. The Dow Jones rose 0.3% to 23435. Nasdaqcomposite however lost 0.2% to 6716.5.
Market sentiment was buoyed by hawkish Fed statement which said US economic activity has been rising at a “solid rate” instead of describing growth as “moderate” like in its September statement. The upbeat statement signaled the central bank is on track for a rate hike in December. The Federal Reserve left interest rates unchanged in a range of 1%-1.25%. Investors are awaiting President Trump’s decision today who will be the head of the Federal Reserve after Janet Yellen’s term ends in February. The White House has notified Federal Reserve governor Jerome Powell that President Trump intends to nominate him as the next chairman of the central bank, according to a Wall Street Journal report.
Commodity shares lead European stocks higher
European stocks rally continued on Wednesday as commodity shares advanced after strong Chinese manufacturing data. Both the euro and British Pound pulled back against the dollar. The Stoxx Europe 600 rose 0.4%. Germany’s DAX 30 jumped 1.8% to settle at record high 13465.51 after trading resumed following Tuesday’s bank holiday. France’s CAC 40 rose 0.2% while UK’s FTSE 100 lost 0.1% to 7487.96. Indices opened lower today.
Mining shares led the rally buoyed by a report Chinese factory activity held steady in October. China is a major consumer of metals and other commodities and strong Chinese demand for commodities is a driver for resource prices. Bank of England meets today and it is widely expected short term interest rates will be raised to 0.5% from 0.25%. The interest rate decision is due at 14:00 CET and at 14:30 CET governor Carney speaks.
Asian indices mixed
Asian stock indices are mixed. Nikkei rose 0.5% to 22539.12 led by miners while yen resumed climbing against the dollar. Chinese stocks are lower: the Shanghai Composite Index is down 0.4% and Hong Kong’s Hang Seng Index is 0.1% off. Australia’s All Ordinaries Index lost 0.1% as Australian dollar accelerated gains against the greenback.
Oil higher as US crude inventories fall
Oil futures prices are edging higher today as US crude inventories fell despite a rise in production. The US Energy Information Administration domestic crude supplies fell by 2.4 million barrels last week. Prices ended lower yesterday on concerns US crude producers will ramp up output as prices have risen recently. EIA reported 46,000 barrels a day rise in domestic output last week bringing the total output to 9.553 million. January Brent crude fell 0.7% to $60.49 a barrel on Wednesday.
Market Analysis provided by IFCMarkets
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