The Fed is expected to leave rates on hold
Wall Street stocks finished little changed on Tuesday as the Federal Reserve started its two-day policy meeting at which Fed Chairman Jerome Powell is expected to maintain his stance that interest rates won’t begin to rise until inflation exceeds the central bank’s target. The Dow Jones gained just 0.01%, while the S&P 500 and the Nasdaq Composite shed 0.02% and 0.34% respectively. In individual stocks, Tesla announced first-quarter results that beat expectations buoyed by sales of bitcoin and regulatory credits.
In Asia, stocks were mixed-to-positive on Wednesday, as investors watched for news out of a Federal Reserve meeting. Also, market players will closely monitor Biden’s speech to a joint session of Congress on increased infrastructure spending and likely higher taxes on the wealthy. Japan’s Nikkei 225 added 0.21%, South Korea’s Kospi slipped 1.06%, Australia’s S&P/ASX 200 added 0.44% while the Shanghai Composite gained 0.42%.
European equities edged higher on Wednesday amid upbeat corporate earnings. In particular, Deutsche Bank stock rallied over 6% after the German bank posted its best quarterly profit since the first quarter of 2014. Lloyds stock rose 4% and the U.K. bank also reported a strong quarterly result, with profit after tax of 1.4 billion pounds. On the data front, Germany’s GfK survey of consumer sentiment fell to -8.8 in May from -6.1 the previous month.
Meanwhile, the dollar edges higher across the board amid rising US Treasury yields. EURUSD remains under some selling pressure while staying above the 100-DMA so far. If the pair extends downside correction from local peaks seen above the 1.2100 figure earlier in the week, the 1.2000 level will come back into market focus. The outcome of the Federal Reserve meeting will set the tone for USD pairs later today.