FOMCThe US dollar replicated the moves seen in Asia a day before, as risk-on sentiment remained the key underlying theme amid upbeat US earnings and firmer equities, helping restore a little faith in emerging market stocks and currencies. On Wall Street, the three major indexes had tallied their biggest one-day percentage gains since March.
The U.S. economic news was also robust, notably a sharp rise in job openings to a fresh all-time high. All this cheer favoured beaten-down currencies in emerging markets while taking some steam out of the safe-haven yen. Not helping the dollar was fresh criticism of the Federal Reserve from U.S. President Donald Trump, who told Fox Business Network: “My biggest threat is the Fed”. Minutes of the last Fed meeting are due out later Wednesday and expected to show policy makers remain committed to further gradual tightening.
A busy EU session today, with the two-day crucial European Union Summit on the Brexit deal kicking off later today. The market sentiment will be driven by the Brexit-related developments while the UK inflation figures could also offer some trading impetus to the GBP markets. Also, in focus remains the Eurozone final CPI data due on the cards at 09:00 GMT alongside the release of the construction output. The US docket remains quite eventful as well, with the US housing starts and building permits data slated for release at 12:30 GMT ahead of the speeches by the ECB Vice-President Weidmann and FOMC member Brainard. The main highlight in the NA session remains the FOMC minutes due at 18:00 GMT.
In commodity markets, both crude benchmarks are trading relatively flat while gold prices on Comex dropped below $1,225.00 amid a better risk environment, just short of recent 11-week highs. Oil prices edged up yesterday, as industry data showed a surprise decline in U.S. crude inventories. There was also a risk that crude supply from the Middle East could be disrupted by looming U.S. sanctions on Iran and growing tensions with top exporter Saudi Arabia. U.S. crude rose 9 cents to $72.01, while Brent crude added 4 cents to $81.45 a barrel.