Weekly reviews

FOMC meeting and subsequent press conference are the main event of the week

On Monday, European stock indexes are trading higher, amid a positive market sentiment, and a geopolitical tension around North Korea eased. The US Secretary of State said that the US is looking for a "peaceful solution" to the conflict with North Korea, saying that if diplomatic efforts fail, the military solution will remain the only available. It seems that markets are becoming less sensitive to tensions with North Korea and are using news on the subject as an excuse for growth.

Asian markets started the week positively. The growth of indices increased where the index of the South Korean Kospi SEU gained by 1.3%.

This week the main market’s focus will be around Fed meeting and the decision on the rate as well as the publication of updated economic data - the housing market in the US, inflation in the euro area and business activity indices.

Despite some negative statistics from the US, the leading world economy passed the stage of post-crisis recovery, after which it moved to the growth phase, where it dwells till now. As many experts suggest, economic growth in the US can continue for another two years.

The Fed, like any other World Bank, in the course of realizing its economic goals, needs space for maneuver. Thus, we can expect the Fed to continue the process of normalizing monetary policy. The remaining question is the timeline and low inflation data.

The answer to this and other questions market participants hope to receive on Wednesday, September 20, when the Fed will announce the decision on the rate, as well as publish the latest economic forecasts and an accompanying statement. It is important that the agenda of the September FOMC meeting includes a press conference in which Janet Yellen, the head of the department, will make a speech. Since hopes for a rate increase in September are minimal, market participants will analyze with special interest what Mrs. Yellen will say about the Fed's further steps.

The oil market remains at the levels of Friday's closing, the $ 55.50 zone. The technical picture suggests an increase to the strategic level of resistance - the $ 56.60 zone. Protective assets remain under pressure. Gold and the Japanese yen opened the week in the red. Eur/Usd is stable. The pair is trading around 1.1947. This week we expect the recovery of stock indices to continue.