- Futures rise in anticipation of the Fed’s decision, the dollar corrects lower
- The market with the focus on central banks.
- The ECB meets in an emergency due to the fall in bonds from non-central countries.
Equity markets are recovering ahead of the Federal Reserve decision and US data. The ECB is in an emergency meeting. The dollar corrects downwards.
To that of the Fed, the ECB meeting is added
The actions in Europe reacted positively after learning that the European Central Bank met to discuss thefragmentation”, that is, the rise in the yields of countries like Italy compared to those of Germany. It is not clear if there will be specific announcements. The meeting has been going on for two hours. The DAX rises 1.33%, the FTSE 100 1.32%, the DAX 1.33% and the Italian FTSE MIB index leads the board with an advance of 2.95%. Italy bonds are having the best day since 2020.
The euro was favored by the novelty of the ECB initially, but then lost steam. EUR/GBP hit the highest in over a year above 0.8700, but then turned negative for the day. EUR/USD tested levels above 1.0500 and prior to the Wall Street open it trades at 1.0460.
The S&P advances 0.80% before the opening and the Nasdaq 1.05%. US stocks recover after sharp falls and before knowing important decisions. The markets show a certain calm although it does not seem to be lasting.
Treasury yields are retreating from highs in years. The 10-year tranche came close to 3.50% on Tuesday and is at 3.36%. The market has discounted that the Fed will raise the interest rate by 75 basis points. The dollar in this context it has lost strength and is falling after rising for several days in a row. DXY is down 0.65% to trade at 104.85, having hit 105.65 yesterday, the highest level since December 2002. With events ahead, a return of volatility seems guaranteed.
The Fed’s statement with the decision will be known at 18:00 GMT. The meeting will include a lecture by Jerome Powell and the publication of new projections of macroeconomic variables from the FOMC staff. Prior to this, retail sales data for May and the Empire Manufacturing index will be released in the US morning.
The prices of Petroleum they retreat less than 1%, and fall for the second consecutive day. The EIA will publish its weekly inventory data on Wednesday. The Prayed and the silver they are rising, recovering from lows in weeks. XAU/USD climbed above $1830 and XAG/USD is testing $21.50.
The cryptocurrencies they remain under pressure and problems are mounting in the sector. The Bitcoin managed to resist the first test to the $20,000 zone. Coinbase falls almost 2% in the premarket.
Technical levels
Source: Fx Street
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