Markets without clear direction, looking at the Fed

• Wall Street futures fall on average 0.35%, in Europe the markets operate mixed.
• The dollar without major changes on Tuesday, remains firm.
• Metals stabilize after big falls.

Equity markets oscillate between gains and losses on Tuesday, trading sideways ahead of the Fed meeting starting, also on the lookout for corporate results and ahead of major US data.

Moderate declines in futures and yields

After ending Monday with a rise of 0.57%, S&P 500 futures point to a red open down 0.43%. In Europe, the FTSE 100 falls 0.83%, the DXY rises 0.05% and the IBEX 35 advances 1.25%. There is no clear direction in the markets, pending important events and data.

The rise in treasury bond yields still in the news as the 10-year rate hit 3% for the first time since 2018 on Monday. On Tuesday they are receding modestly.

The expectation is centered on the meeting of at fed which starts on Tuesday. A 50 basis point hike would be announced on Wednesday, the biggest increase in 22 years. In turn, it would also indicate how the quantitative adjustment of the central bank’s balance sheet will begin. In this context, the dollar remains firm, although it slowed its advance on Tuesday. The DXY remains at 103.60, without relevant changes, holding in the area of ​​maximums in years.

Hours ago it was Reserve Bank of Australia who announced a rise in the interest rate. In this case of 25 basic points, exceeding the expectation of an increase of 15 points. This boosted the Australian dollar, which rose the most among major currencies on Tuesday. On Thursday the Bank of England is also expected to raise the benchmark rate.

Monetary tightening has been a negative factor for equity markets for months and could continue to be so, especially if inflationary pressures remain. In Europe, the German 10-year bond rate (momentarily) exceeded 1% for the first time since 2015.

The rise in yields in the world affected metals these days. Gold is trading at $1860, having fallen in the European session to $1849, the lowest in two and a half months. Silver recovers after hitting $22.11 on Monday, the lowest since early February.

The prices of Petroleum they fall on Tuesday and return to the level they had at the beginning of the week. Ministers from the Organization of the Petroleum Exporting Countries and their allies, including Russia, will meet on Thursday. In the European Union the proposal to ban Russian oil by the end of the year continues to circulate

In addition to the Fed, there will be these days US key facts of the labor market (Wednesday ADP and Friday NFP). On Tuesday, the labor notices report and the factory orders report will be published. On Monday, April activity data from the manufacturing sector came in below expectations.

Investors also continue to assess the first quarter corporate results. On Tuesday they report before the opening Pfizer, S&P Global and Biogen; while after the closure, Airbnb, Starbuck and AIG will do so.

Technical levels