Market Snapshot – Fed Meeting Minutes in Focus

Markets Await The Fed Meeting Minutes

The Federal Reserve will release its meeting minutes today at 19:00 GMT.

The meeting minutes is expected to be very crucial in determining the short term direction. During the previous weeks, investors are swinging between hawkish and dovish comments coming from FOMC members.

Any future signals of the next rate hike will add to markets volatility. Be cautions while trading the gold and the US Dollar.

Markets are currently pricing 20% of a rate hike in the next Fed’s meeting, according to Fed Funds tool.

Political Uncertainty Weigh on Eurozone

Leading the Euro lower are market concerns about the anti-European Union rhetoric from French presidential candidate Marine Le Pen ahead of the first round of French elections on April 23. She wants France to pull out of the Euro Zone and also hold a referendum for the country to leave the European Union.

Investors are concerned that Le Pen’s popularity is gaining in the polls. Recent poll shows she is closing the gap between her and front-runners Emmanuel Macron and Francois Fillon.

The Euro is trading at 1.0511, -0.25% taking out its February 15 bottom on its way to testing its lowest level since January 11.

US Dollar Steady Ahead of Fed Meeting

The Dollar was on the bounce through the Asian and European session this morning although it is trading higher versus most major currencies. Sentiment towards the release of the FOMC meeting minutes later this evening driving appetite for the Dollar as the markets weigh up on the balance of power between the Hawks and the Doves.

Markets are likely to react to the release of the latest Fed minutes from their monetary policy meeting in February at 1900 GMT so expect to see some volatility.

The US Dollar is trading steady at 101.56 +0.11%. The Dollar is trading higher versus most currencies excluding the USD/JPY which stands at 113.00, down 0.59% due to BoJ governor Kuroda comment of further easing program by the Japanese central bank.

Oil Prices Edge Lower on Strong US Dollar

Oil futures are trading lower early Wednesday. A stronger dollar is helping to curtail demand for the dollar-denominated commodity, putting pressure on the market.

Yesterday, crude oil surged to a seven-month high on optimism over OPEC’s deal with other producers to curb output, trim the global supply and stabilize prices. Record long open interest by hedge funds and commodity funds is also seen as providing support.

Even with OPEC’s reduction in supply, the inability to follow-through to the upside and sustain a rally, may be suggesting that investors are starting to doubt that the plan will be sufficient enough to translate into large inventory draws by the second quarter of this year.

Later today, the American Petroleum Institute will release its latest inventories report. Analysts and traders are forecasting a 3.325 million barrel rise in crude oil stockpiles for the week-ending February 17. Gasoline inventories are expected to come in at 1.625 million barrels and distillates are expected to post a 1.075 million barrel draw down.