By IFCMarkets

US stock market ended slightly lower on Wednesday after the Federal Reserve statement indicated a rate hike is likely by year end. The dollar weakened: according to the live dollar index data the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, edged 0.4% lower to 96.749. The Dow Jones industrial average slipped 1.58 points to 18472.17, a 6.6% gain in Apple shares limiting the fall in blue chip index after the company reported smaller-than-expected decline in earnings. The S&P 500 closed 0.1% lower at 2166.58 led by consumer staples and utilities with technology and telecom shares posting small gains. The Nasdaq Composite Index advanced 0.6% ending at 5139.81. Treasury prices rose Wednesday with the yield on the benchmark two-year note declining 3.2 basis points to 0.730%. The Federal Reserve left interest rates unchanged. The central bank said near-term risks to the economic outlook have diminished and it expects the US economic activity will expand at a moderate pace while the labor market continues to strengthen. The statement hinted policy makers are more inclined to raise the interest rates later in the year but weak durable goods orders, which sank 4% in June, the biggest drop in almost two years, indicate the third quarter GDP will be lower than previously projected because of the drop in business investment. And the Federal Reserve will most likely not raise the rates under conditions when the US economic growth slows. The changes in fed fund futures prices reflected the dovish impact of disappointing durable goods orders, indicating a 47% chance of a rate increase by the end of the year, down from 52.2% before the statement release, according to CME Group’s FedWatch tool. Today at 14:30 CET June advance Goods Trade Balance will be published. At the same time Initial Jobless Claims and Continuing Claims will be released, the tentative outlook is negative for dollar. At 17:00 CET July Kansas City Fed Manufacturing Index will be published. The tentative outlook is positive. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.

European stock markets closed higher on Wednesday helped by gains in French stocks. The euro and the Pound strengthened against the dollar. The Stoxx Europe 600 edged 0.4% higher. France’s CAC 40 index outperformed rising 1.2% as Peugeot shares jumped 9.3% after the car maker reported first-half net profit more than doubled to €1.2 billion ($1.32 billion) on lower costs. Germany’sDAX 30 index closed 0.7% higher at 10319.55 despite a 3.2% drop in Deutsche Bank shares on weaker than expected earnings: it slid 98% to €20 million ($22 million) from the same period last year UK’s FTSE 100 closed 0.4% higher. Today at 10:30 CET July Unemployment Rate and Change will be released in Germany. At 11:00 CET July business, economic and consumer confidence indexes will be published in euro-zone. And at 14:00 CET July preliminary consumer price index will be released in Germany, the tentative outlook is positive for euro.

Asian stocks are retreating today after Chinese stocks extended losses following yesterday’s news Chinese regulators are planning to curb stock market investments by wealth managements financial institutions. Hong Kong’s Hang Seng Index is down 0.7% while Shanghai Composite Index is up 0.1% and Australia’s S&P ASX 200 is 0.39% higher. Nikkei fell 1.1% today as stronger yen hurt exporters’ profit outlook and investors took a cautious stance ahead of Bank of Japan’s policy decision on Friday. The central bank is expected to lower its inflation forecasts and expand its asset purchases program, and possibly further cut interest rates deeper into negative territory.

Oil futures prices are edging lower today after falling to their lowest levels in more than three months on Wednesday following a report US crude oil stockpiles and output, together with gasoline inventories, rose last week. US crude supplies rose by 1.7 million barrels last week instead of an expected 2.6 million-barrel decline, as domestic crude output rose 21000 barrels to 8.515 million barrels a day. September Brent crude fell 2.5% to $43.77 a barrel on London’s ICE Futures exchange on Wednesday.

Gold is advancing after spot gold gained 1.5% on Wednesday after Federal Reserve left interest rates unchanged hinting at a rate hike later in the year. Platinum hit a fresh 14-month high today gaining 1.1% at $1148.50 an ounce.

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