Weekly reviews

Markets expect FOMC decision

European stock indexes are traded mixed on Wednesday, being under insignificant pressure. Investors continue to take a wait-and-see attitude before the decision of the Federal Reserve System. Futures for US indices are traded neutrally, close to historical highs. Asian markets closed neutrally as well.

As expected, the Committee on Open Market Operations (FOMC) is likely to leave the rate unchanged, but may voice plans related to the reduction of the Fed's giant balance. If the leaders of the Fed confirm good prospects for economic growth, the chances of a third rate increase this year will go up, especially given the recent positive data on consumer inflation. Now the probability of a rate increase, tracked by the CME Group, rose to 58.3%, while the week before it was estimated at just 41.3%. Analysts expect that the statement may be followed by rising volatility in several classes of assets, such as stocks, currencies and gold.

As for the reduction of the balance, the markets are ready for this event, and has already priced in current market levels. For example, gold can experience pressure only if the Fed declares its intention to reduce the balance much more than market participants expect.

Speaking of gold, yesterday gold stabilized and suspended the decline. Previous lows were not updated, precious metal slightly gained. Thus, the daylight candle closure showed a slight increase. The question now what is it? A true turn or a slight corrective pullback from a decline and the nearest target of 1300 remains in effect. We hope that the closure of today's daylight candles will clarify the situation.

In the FOREX currency market, the main currency pair Eur / Usd demonstrates, although not significant, but consistent growth, and this is clearly visible on the chart. The eur / usd is steadily gaining, showing its willingness to return above the psychological level of 1.2000 and re-test the key resistance area 1.2070-1.2090 in the current situation.

The Brent oil market continues to accumulate strength for the final break through a resistance of $ 55.75. API statistics showed an increase in crude oil reserves by 1.4 million barrels. The market reacted to the data quite calmly. On Friday, a meeting of OPEC ministers will take place, from which the market is likely to receive verbal support. The day promises to be interesting and volatile.