Market Snapshot – Focus on the Dollar as FOMC Minutes Loom

Stock Markets Broadly Higher

The stock markets in Europe were largely higher as the risk sentiment got better all around the world and this helped the recovery in the stock markets. The challenge to the tapering in an European court also seems to be fizzling out in due course of time and this is likely to help the European stock markets move higher even further. The rally in the markets has been a broad based one and driven by the fundamentals around the world rather than anything specific to any region. This has been the case over the last week or so where the happenings in one part of the world has affected the markets in another which shows how much of an interconnected world we live in.

Focus Firmly on the Dollar

With the focus on the stock markets during the early half of the day, the latter half of the day is likely to see the focus being shifted to the dollar as we have the FOMC meeting minutes scheduled to be released later in the evening. We also have the oil inventory data from the US which is likely to keep the oil traders busy. As for the minutes, the market would be expecting the Fed members to give some guidance on how they plan to handle the balance sheet normalisation and would also watch for any hints on when the next rate hike would be. With the data from the US getting better, the timeline for the next rate hike is likely to be uppermost in the minds of the traders and it should guarantee a volatile latter half of the day.