FOMC Likely to Be Dovish on Balance
STOCK INDEX FUTURES
The main focus of traders’ attention today is the conclusion of the two-day Federal Open Market Committee meeting. A statement will be released at 1:00 central time and Federal Reserve Chairman Jerome Powell will hold a press conference at 1:30.
U.S. stock futures are higher as investors await clues on the Federal Reserve’s next steps to bolster the economy.
This week is the busiest week of the corporate earnings season. Just over a third of companies in the S&P 500 have reported through Tuesday.
Earnings at major U.S. companies so far have beaten analysts’ downbeat expectations with 78% of firms topping estimates.
The 9:00 central time June pending home sales report is expected to show an increase of 5.2%.
U.S. stock index futures have recently performed well for the news.
Much of the trade appears to be evening up ahead of today’s Federal Open Market Committee meeting statement.
In the overnight trade the U.S. dollar fell to its lowest level since October 2018.
The Australian dollar is higher despite news that Australia’s consumer price index fell 1.9% in the June 2020 quarter compared to an increase of 0.3% in the March 2020 quarter.
INTEREST RATE MARKET FUTURES
At today’s FOMC meeting no change in the federal funds rate is expected. The FOMC will likely maintain its fed funds target range at zero to 25 basis points.
Federal Reserve Chairman Jerome Powell could offer guidance on monetary policy at the post-meeting press conference.
I believe the FOMC statement and comments from Fed Chair Powell will be at least slightly dovish on balance.
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