After a few quiet days, there are several important data releases today with Super Thursday for the UK standing out as the most important one. With Brexit looming over the horizon, it is very likely that the press conference following the rate decision will focus on the upcoming referendum with any views on it, to be thoroughly analyzed. Besides Brexit, there are three FOMC voting members scheduled to speak today.
Stocks: Stock markets were hurt by disappointing earnings results of Disney (DIS) and Macy’s (M), reigniting concerns over consumer spending. DJIA dropped -217.23 pts, or -1.21% to close at 17711.12, revising this week’s gain. S&P 500 also dropped -19.93 pts or -0.96% posting the biggest one day decline since April. Asian stocks are also in the red at time of writing despite OIL’s rally while European equities traded weakly during the NY session and printed losses as well.
Currencies: USD retraced some of its recent gains on Wednesday but not enough to seriously jeopardize the USD-bounce theme. The news on the day focused on oil because of a surprise draw in US supplies that sent crude quickly higher and CAD along with it. BoE will be the main focus today with rate decision, minutes and quarterly inflation report scheduled. There is no chance of a change in policies before the EU referendum in June. BoE would keep bank rate at 0.50% and asset purchase target at GBP 375b.
Oil and GOLD: Commodity prices remained firm, led by crude oil prices on the surprising inventory decline. The front-month WTI contract rallied to a 2-week high of 46.36 before ending the day at 3.52%. The Brent crude initially soared to as high as 47.75 before settling at 47.6, up +4.57%. Gold futures settled higher Wednesday, rebounding from a nearly two-week low as a pullback in the U.S. dollar boosted the appeal of the precious metal.
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