FOMC left the rate unchanged, WTI responds with a hike

29 January, 2016

A decision on federal funds rate was supposed to be taken at yesterday’s FOMC meeting, which was held on a cautious note. The liftoff was postponed as expected. Committee officials are pointing out a need for a more gradual monetary schedule as the tightening access to liquidity may further arrest the recovery of the world’s economy.

The decision has sent the U.S. stocks in the red zone with Dow Jones dropping by 1.38% (222.77 points) at the session’s closing. S&P declined by 20.68 points (1.09%) to 1882.95. Nasdaq Composite suffered the most tumbling by (2.18%) to 4468.17 points with gloomy corporate data from the Silicon Valley. Apple reported that after a 12% drop in revenue in Q4 2015 the growth in sales averaged at 4% in Q1 2016. YoY growth averages only at 2% which raises concerns over further demand for Apple products. Company stocks slid by 6.57% to 93.42 on these news.

Mixed data released yesterday made WTI grow by 3%. However, this was the first time from December when crude’s rally had no positive impact on stock markets. Russian Ministry of Energy reported that they consider an option to cooperate regarding output levels with OPEC members. Meanwhile Saudi Oil Minister Al-Naimi said that the global supply may exceed the demand by 2M barrels daily and market will probably need time to ease the glut and return prices to reasonable levels.

EIA report posted yesterday showed that despite the cold season and the U.S. companies’ dumping price wars, crude inventories rose by 8.4M barrels almost by two times exceeding the estimate of only 3.3M barrels increase. Today’s session started with Crude dropping by 1.19%, currently hovering near the $32 level.


Source link  
Another currency to climb the peak

The comments of the FED officials Erik Rosengren and Loretta Mester...

Pound trades look risky

The British Pound rose above the level of 1.24 after the Bank of England decision last week...

Go short!

When it comes to the EUR/USD pair, then we have a descending channel on the weekly chart...


Saudi Arabia reversed a third of its production cuts

Oil tumbled during the trading session on Tuesday after OPEC reported that Saudi Arabia raised output while remaining committed to the quota determined at the last meeting of producers in November 2016...

Dutch Elections: Is Netherlands the next domino to fall?

Trump’s triumph and Brexit not only proved that appealing to the crowd works best in the fight for power but also made populism a catching example for other European countries...

Is Oil going down the drain?

The Oil prices continue to be under the strong Dollar pressure, despite the optimistic IEA forecast on the world energy consumption and OPEC striving to deliver more production cuts...


Will the EU and UK concur?

Some FED members have subtly been hinting towards a spring surprise and last Friday Yellen had no other choice than to agree with the statement...

Is Bitcoin taking over Gold value?

While investors are trying their best to estimate the outlook...

Is Europe back on the recovery path?

Dollar keeps its foothold and consolidates before the breakout of January resistance at the 102 level as Yellen is to deliver a speech at Chicago on Friday. American currency took advantage of hawkish FED policymakers pondering over the March hike...

  


Share: