📆 Wednesday, March 20
► European markets edge lower as the Stoxx 600 gauge drops 0.3%, with traders eyeing the Federal Reserve's interest-rate decision. London's FTSE 100 and Germany's DAX indexes showed marginal declines as UK’s inflation showed a more significant drop (down to 3.4% from 4%; vs. 3.5% expected) than anticipated, signaling easing pressures but also raising questions on economic growth sustainability in the UK.
► In the US, futures for major indexes show minimal movement in anticipation of the Fed's monetary policy decision (18:00 UTC+0). The S&P 500 futures remains little changed (- 0.1%) after Tuesday's record closing. The USD index advances for a fifth session, with 10y Treasury yields little changed at around 4.28%. Analysts suggest that if the FED continues with a hawkish approach, the market is likely to react slightly negative due to the overall consistent messaging. Any changes in the dot plot, however, that would suggest less rate cuts in 2024 would cause a sharper correction. If the Fed says it remains data-dependent and still expects rate cuts to be near we would see a positive market reaction. The overarching sentiment in the markets today is one of watchful waiting, with the potential for volatility depending on the central bank's outlook on interest rates and its assessment of the economy.
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