Investors digest the U.S. Federal Reserve’s continued commitment to its supportive policy
U.S. stocks closed nearly unchanged on Wednesday. At the same time, gains for several Big Tech stocks nudged the S&P 500 to a second record high in three days. The Dow Jones Industrial Average rose 0.05%, the S&P 500 index added 0.15%, and the Nasdaq Composite index shed 0.07%.
In its minutes from the March meeting, the Federal Reserve officials indicated that despite an improving economy, the easy policy will stay in place until it produces stronger employment and inflation. The fact that the central bank staffers were in no hurry to tighten monetary support is generally positive for stocks.
Today in Asia, equities were mixed amid very subdued trading, as investors digested the U.S. Federal Reserve’s continued commitment to its supportive policy. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, as well as on the weekly charts. Japan’s Nikkei eased 0.3% and Chinese blue chips shed 0.1%. U.S. stock futures nudged to another record high.
European stocks opened on a positive note, with the Stoxx Europe 600 Index tracking U.S. futures higher. On the data front, Germany’s March construction PMI arrived at 47.5 versus 41.0 prior. Also on the positive side, Spain’s economy minister said they are on track to vaccinate 70% of the population by the summer. Meanwhile, the ECB Chief Economist Phillip Lane said that inflation is significantly volatile amid the pandemic but it remains low overall while favorable financing conditions must be maintained.
In currency markets, the dollar managed to bounce from two-week lows to end mostly higher on Wednesday. The greenback showed no immediate reaction to the FOMC meeting minutes, as the headline statement was broadly in line with market expectations. As such, EURUSD briefly exceeded the 1.1900 figure before retreating back to negative territory. On Thursday, the pair regained bullish bias, but the impetus looks too modest to bet on robust gains in the short term.