Thursday, 23 February 2017
Wall Street flats amid growing bets on a Fed rate hike
US equity markets were pointing to a slightly positive opening on Thursday as market players looked ahead of further economic reports and hints on the timing for a future Fed rate hike.
Yesterday, Wall Street indexes closed mixed following the publication of minutes from the Federal Open Market Committee for the Jan 31 - Feb 1 policy meeting. According to the document, the FOMC members agreed that a rate hike could become effective “fairly soon”.
"Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon" if economic and labor reports continue to be "in line with or stronger than their current expectations," Fed minutes stated.
The FOMC is gathering on March 15 for a second meeting under a Trump administration and odds for a rate hike stand at 27 percent, according to CME Group’s FedWatch program.
From a data perspective, the only relevant report was existing home sales, which increased by 3.3 percent in January. Analysts were expecting a 1.1 percent build.
- Dow Jones Industrial Average: +0.02 percent / 20,624.05 points
- Standard & Poor’s 500: +0.17 percent / 2,351.16 points
- Nasdaq Composite: +0.41 percent / 5,838.58 points
In a light day for data, initial jobless claims are due to be release at 13:30 GMT, with analysts pointing at a 2,000 increase to 241,000 applications. Commodity traders will pay close attention to official crude inventories after API reported overnight an unexpected drop of stockpiles.
European markets have opened mixed, with traders focusing on earning reports. The Euro Stoxx 50 was 0.27 percent higher as of 09:50 GMT, to trade at 3347 points.
In Asia, equities ended in red territory on Thursday as a reaction to the Fed minutes, which increased speculation over a sooner-than-expected rate hike in the United States.
Japan’s Nikkei 225 closed almost unchanged around 19,371.46 points. Hong Kong's Hang Seng index was down by 0.38 percent, while China's Shanghai composite posted a similar loss of 0.31 percent. Australia's ASX 200 dropped 0.35 percent to end at 5,784.66 points.
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