Originally published by Rivkin Securities
It was another uneventful session for US stocks with the Dow Jones closing virtually flat and the S&P 500 up 0.17%. The market appears to be waiting for the FOMC meeting (which occurs early tomorrow morning AEST) at which it is widely expected that interest rates will be hiked by 25 basis points to a range of 1.75-2.0%. The uncertain part of the meeting is what the statement will indicate regarding further interest rate hikes this year. The market is also watching to find out the next step in the balance sheet normalisation process. The Fed has already started letting some maturing bonds roll-off without reinvesting the proceeds which is having the effect of gradually reducing its balance sheet. The market expects that at some point this process will be accelerated.
Gold prices have been stuck in a very narrow range recently, remaining just below US$1,300 per ounce. Gold has been consolidating at around this range following the declines that occurred in late April and May. The outcome of the FOMC meeting will be critical for the future direction of gold. Oil traders are holding out for the outcome of the OPEC meeting at which members are expected to discuss plans for phasing out the production cuts that have now achieved their purpose of reducing global inventories.
ASX 200 futures are down 8 points this morning.
Data Releases:
- UK CPI 6:30pm AEST
- US FOMC meeting 4:00am AEST