Powell led first Fed meeting concludes today - 21.3.2018

Energy shares lead US stocks recovery

US stock indices recovered Tuesday led by energy shares. The S&P 500 gained 0.2% to 2716.94. Dow Jones industrial average rose 0.5% to 24727.27. The Nasdaq composite index added 0.3% to 7364.30. The dollar rebounded ahead of Fed decision: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.6% to 89.906. Stock indices futures indicate higher openings today.

Rising crude oil prices lifted energy shares which led the stock market recovery after pullback following technology stocks selloff Monday. Federal Reserve’s interest rate decision and Powell’s first press conference following the conclusion of the policy meeting today will be in the focus today. Fed funds futures market is pricing in a 94.4% likelihood of a rate hike. Investors are on lookout for signs of more aggressive monetary policy stance. Policy makers may update their forecast for interest rate hikes in 2018 to four from three. They may also upgrade US economic outlook such as revise upward US growth forecast, at 2.5% annual rate now, as well as lower their unemployment forecast, currently at 3.9% and raise their expectations for core inflation, presently at 1.9%. A hawkish central bank stance will necessitate a re-pricing of risks for the economic growth which should be bearish for the stock market.

NasdaqI

DAX leads European indices recovery

European stocks erased some of previous session losses on Tuesday as euro weakened following a weak German business sentiment report. The British Pound turned lower against the dollar. The Stoxx Europe 600 rose 0.5%. The German DAX 30 gained 0.7% to 12307.33. France’s CAC 40 rose 0.6% and UK’s FTSE 100 added 0.3% to 7061.27. Indices opened flat to 0.2% higher today.

Euro retreated after the ZEW institute reported German economic sentiment index fell to below expected 5.1 in March, from 17.8 in February. Pound retreated after UK inflation in February slowed to 2.7% from 3% in January. That was below the 2.8% rate expected.

Asian markets mixed

Asian stock indices are mixed today. Japanese markets are closed for a public holiday marking the first day of spring. Chinese stocks are falling: the Shanghai Composite Index is down 0.3% and Hong Kong’s Hang Seng Index is 0.04% lower. Australia’s All Ordinaries Index is up 0.2% as iron ore prices bounced back despite stronger Australian dollar against the greenback.

Brent slides

Brent futures prices are edging lower today. Prices jumped yesterday on rising tensions in the Middle East. The American Petroleum Institute late Tuesday report indicated US crude inventories fell by 2.7 million barrels to 425.3 million last week. May Brent rose 2.1% to $67.42 a barrel Tuesday. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.