Sentiment will be dictated by the Federal Funds rate decision given later today. The Fed are expected to raise interest rates by 25 basis points. While the rate hike has already been priced into markets, watch out for currency markets and gold, which will be particularly sensitive to the outcome of today’s statement, where Janet Yellen will lay out previsions for future rate increases.
US Equities
The S&P 500 and Dow Jones reached all-time highs yesterday. The S&P added 0.5% to its value to close at 2440 meanwhile the Dow Jones gained 0.4%.
Stocks have mostly held onto their gains this morning.
The rally was inspired by a rebound in technology stocks. Tech stocks have been the back-bone of this year’s surge in US indices.
European Stocks
The rally in the US spurred positive ripples throughout the European market. Again, European tech stocks are leading the way.
The stronger pound is holding back the FTSE 100, although the index is still making some gains, up 0.44% this morning.
Forex
USD
The dollar has weakened ahead of today’s interest rate decision. The Fed are expected to raise rates by 25 basis points.
EUR
The euro has also declined thanks to a weak German inflation reading. Forecasts were at 0.5% while the actual came in at -0.2%.
EURUSD
GBP
The pound has risen, shaking off the disappointing results from last week’s general election.
GBPUSD
Resistance level is at $1.28 and support is at $1.274. Although momentum is moving down so watch out for bearish movements within the next few days.
CAD
The Canadian dollar continued to inch up against its US counterpart. The senior deputy governor at the Bank of Canada helped to support the Canadian dollar, hinting that an increase in interest rates could happen this year.
USDCAD
The Canadian dollar is 0.2% stronger against the dollar.
Support is at $1.32 and resistance lies at $1.3265. Momentum is gradually ticking upwards signalling bullish tones. However, watch out for the US interest rate decision given later today as CAD is especially sensitive to rate increases in the US.
Commodities
Oil
Oil prices fell yet again after a report showed output from OPEC countries rose in May. Slowing demand coupled with defiant OPEC members and increased supply from the US shale industry have all weighed on the price of oil.
Crude Oil
Momentum is sloping downwards meaning there could be even more bearish movements ahead.
Gold
Thanks to the weaker dollar, gold rose 0.16%. This precious metal will be quite volatile today thanks to the US interest rate decision. If the Fed are ‘hawkish’ or positive about future interest rates gold may decline.
Momentum is in the process of forming but looks as if it may tick downwards as we veer further into the trading session, so watch out for bearish moves.
