US stocks ended slightly lower on Wednesday notwithstanding the gains after the release of Federal Reserve’s recent meeting minutes. The S&P 500 closed down 0.1% at 2,125.85. The minutes revealed policy makers were more dovish than they were at March meeting and a rate hike in June is unlikely. While most policy makers agreed economic growth would rebound after disappointing 0.2 percent growth in the first quarter and the labor market would strengthen, only a few thought the economy would improve enough to warrant a rate hike at the next Fed meeting on June 16-17. Earlier on Wednesday Chicago Fed President Charles Evans, speaking on economy at a symposium in Munich, said that US interest rates should not be increased until early 2016. Evans is considered the most dovish voting member of the FOMC. The dollar continued strengthening, the ICE US Dollar Index rose about 0.3% to 95.5540. Today at 13:30 CET Initial Jobless Claims will be released in US. The tentative outlook is negative. At 14:45 CET preliminary Manufacturing PMI for May will be released by Markit. The tentative outlook is positive. At 15:00 CET May Philadelphia Fed Manufacturing Index will be released. At the same time April Existing Home Sales and Leading Indicators will be released. The tentative outlook is positive.
European stocks ended higher on Wednesday as shares of financial institutions rose after regulators leveled charges totaling $6 billion against US and European banks for manipulating foreign currency markets. The Stoxx Europe 600 rose 0.4% to 406.42, lifted by gains in the telecom and financials sectors. The euro continued to fall in the wake of the European Central Bank official comment that the bank will step up bond purchases this month and in June, strong housing starts data in US on Tuesday and on concerns about unresolved Greece debt crisis. Greek government’s parliamentary speaker said Greece won’t be able to make a payment due June 5 to the International Monetary Fund unless an agreement is reached with its creditors. The Athex Composite fell 0.7%. Today at 11:00 CET ECB Monetary Policy Meeting minutes will be released. And at 15:00 CET Consumer Confidence advance estimate for May will be released in euro-zone. The tentative outlook is negative. Tomorrow at 7:00 CET the final reading of first quarter GDP will be released in Germany. The tentative outlook is neutral.
Nikkei ended flat today after hitting a 15-year high as investors took profits before the Bank of Japan two-day meeting on Friday. Tomorrow at 1:00 CET Bank of Japan Monetary Policy Statement will be released. And at 4:00 CET Governor Kuroda will give a press conference.
Oil prices climbed on concerns of rising tensions in Middle East and falling crude oil inventories in US. The EIA report indicated the US shale oil output remained flat at 8.87 million barrels-a-day in the past week, while inventories fell 2.7 million barrels. As two Iranian warships linked up with an Iranian vessel believed to be carrying humanitarian aid for civilians in Yemen, market participants are concerned they may sail directly to Yemen without agreeing to United Nations inspections. This may cause a conflict between Iran and the US and Saudi Arabian forces, jeopardizing crude supplies in the region.
Gold prices rose on Wednesday as the FOMC meeting minutes showed a rate hike in June is not likely.