Fed decision day is finally here. A 0.5% hike remains the consensus expectation among investors but investors may look to the statement for hints on whether tightening could accelerate. The 10-year US treasury note yield has dropped back toward 3.35% this morning from near 3.45% yesterday suggesting that market speculation on a possible surprise 0.75% hike may be fading. Investors may also look to member projections on inflation, GDP and future interest rates for clues about where the US central bank may be heading from here.
Coming off of a mixed Tuesday that saw the NASDAQ climb 0.2% and the Dow drop 0.5%, US index futures are up 0.8% to 1.0% this morning. Over in Europe the DAX and FTSE are both up about 1.3%. Less than a week after the European Central Bank announced a monetary tightening program of reduced asset purchases and interest rate hikes, the ECB held an unscheduled meeting today and announced plans to create an “anti-fragmentation” tool to deal with a growing spread in treasury yields among members, particularly countries like Italy and Greece relative to Germany, that was starting to sound like 2012 all over again.
The US Dollar has also started to ease back this morning. Gold is up 1.0%, the Pound is up 0.7% and the Euro is up 0.2%. With copper flat and WTI crude oil down 0.4%, the Loonie is steady against the greenback. In a reminder that investors remain cautious overall, however, cryptocurrencies are getting slammed again, with Bitcoin falling 4.4% and Ethereum diving 7.2%.
US retail sales (-0.3% vs street +0.2%) and the Empire Manufacturing Survey (-1.2 vs street +3.0) both came in weaker than expected. Canadian housing starts were better than expected in May (287K vs street 252K). Central Bank meetings continue through the rest of the week with decisions still on the way from the Bank of England, Swiss National Bank and Bank of Japan over Thursday and Friday.
SIA Wealth Market Outlook Webinar With Colin Cieszynski Tomorrow at 2:00 pm EDT
Please join us on Thursday, June 16 @ 12pm MT / 2pm ET for our monthly Market Outlook Webinar.
Join SIA Wealth Chief Market Strategist, Colin Cieszynski (CFA, CMT) will be speaking to some of the most frequently asked questions from advisors over the last month including: defensive versus tactical investing strategies, the state of the economy and markets heading into summer, and past experience in US midterm election years.
Register for the webinar: https://attendee.gotowebinar.com/register/4435072988595309836
After registering, you will receive a confirmation email containing information about joining the webinar. A replay will be available and sent to all registrants after the webinar, with the presentation included.
