On Tuesday, stock markets were growing in anticipation of the Open Market Committee meeting and the subsequent press conference. At this conference, we are very likely to hear about the Fed’s next steps to improve the US economic climate.
The third week of September generally began with positive news from various sectors. Information about the imminent arrival of the coronavirus vaccine, as well as good data on China’s economic recovery, was increasingly encouraging for investors.
Of course, the current decisions taken at the Fed meeting will determine further movement on financial markets. Only after the reports and the press conference will it be possible to try to predict future movements. So far, the markets have been waiting with a little optimism.
European investors are also looking forward to the upcoming meetings of the US Federal Reserve, Bank of Japan and Bank of England. A weak movement of major indices was demonstrated during the trading. DAX rose by 0.18% and closed at 13210.
European macro statistics show that inflation is slowing down further. The debate on Brexit in the UK Parliament is also fueling the fire. There is only a month left until the deadline between London and Brussels to reach an agreement.
All this is putting pressure on the pound, although he is showing signs of some recovery. It will probably not last long as the 1.30 level is a very strong resistance for the GBP/USD pair.
We have repeatedly said that gold will continue to grow and show new highs in the near future. Perhaps after the US Federal Reserve meeting, we will see an attempt to get above $2000 per ounce. Powell will be sure to raise the issue of inflation and explain how ready the central bank is to let the target level be exceeded. The more “pigeon” the Fed position is, the more likely it is that the US dollar will weaken. This, in turn, will be good for gold as the price increases and demand increases. As usual, before important events, the gold level has come close to the key level of $1960 per ounce, which the bulls will already be trying to pass.
What awaits us today?
08.00 UK consumer price index since the beginning of the year
14.30 US retail sales volume for August
16.30 US crude oil reserves
20.30 Press conference of the US Federal Reserve’s Open Market Committee
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