Gold 1801,935
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EURUSD 1,1834
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DJIA 34276,50
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OIL.WTI 73,235
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DAX 15405,50
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All financial markets were waiting for the publication of the minutes of the US Federal Reserve meeting. They were expected to be something interesting which would shed light on further plans for a possible QE rollback, but unfortunately all expectations were not fulfilled.
S&P500
In the minutes, Fed officials made it clear that a reduction in quantitative stimulus would begin when there are more favourable economic indicators and a sufficiently high percentage of coronavirus vaccinated citizens. These conditions have not yet been reached as things currently stand, so we will have to wait.
Next, the inflation announcement. The Fed is confident that inflation will remain under control in the longer term. The rise in inflation above expectations is a temporary factor. The Fed expects inflation to fall to 2% in the longer term.
Overall, we have not heard anything new or interesting. As we predicted before, the Fed will not make any major moves for the summer so as not to spook the holiday season. The next meeting is planned for July 27-28, which may bring some more news, and on September 21-22, when everybody will be out of holiday, the markets will be ready for the Fed’s actions.
Usually the volatility in the markets is always higher during the minutes. Everybody starts to scrutinize every line in the minutes and draw conclusions. Because of this the volatility increases. The volatility usually dies down after a few days, until the markets digest all the information and re-form their holdings.
Regarding the current situation. On Thursday investors got a little bit scared and started to sell off assets, switching to dollar, but close to the evening the market started to gain, and S&P500 index could not break through the 4300 level and bounced up.
So far, nothing much happened and most likely, the S&P500 index will continue its upward movement, though for many people such levels are already out-of-limits, and the companies, included in the index, have bloated in capitalization.
03.30 China consumer price index for June
08.00 UK May GDP
14.30 Canadian unemployment rate for June
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