Key Points
- FTSE 100 closing price of 7185.1, +0.18%
- Shares steady ahead of the Fed decision
- GBP strong after UK inflation soars
- Oil elevated following US crude draw
- Cryptos steady, Bitcoin below $40K
By Samuel Indyk
Investing.com – The FTSE 100 eked out gains in relatively quiet trade ahead of the Fed interest rate decision. The central bank is not expected to make any changes to its monetary policy instruments at this juncture with focus on the communication around the QE programme and timing of the first interest rate hike. The Fed have sounded a cautious tone recently and it is expected they will acknowledge that tapering asset purchases is something on the horizon without setting out concrete plans for doing so. Some analysts are also expecting the median view for the first interest rate hike to shift into 2023.
The announcement will take place at 19:00BST with a press conference to follow at 19:30BST.
GBP was relatively strong with GBP/USD reclaiming 1.4100 following the latest deluge of inflation data from the UK. The Office for National Statistics said CPI rose 2.1% on an annual basis in May, above the expected 1.8%. This was the first time the measure has risen above the Bank of England’s 2.0% target since July 2019.
Oil prices again traded higher with Brent looking to test $75 to the upside. WTI pushed higher in the wake of the latest US inventory data which showed a drawdown of 7.35mln barrels in the latest week versus expectations of a draw of 3.29mln barrels.
Gold prices were treading water ahead of the Fed interest rate decision with the range smaller than $10.
In the cryptocurrency space, Bitcoin was relatively steady but has shown signs of some weakness after trading above $41,000 on Tuesday. The world’s largest cryptocurrency moved back below $39,000 but still remains well off the low levels seen during the back end of last week. Other major cryptocurrencies have shown similar price action with Ethereum pulling back towards $2,400 after trading above $2,600 earlier in the session.
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