Written by Jeffrey Smith
Investing.com – The Federal Reserve is starting a two-day meeting with troubled markets, trying to raise key interest rates by 75 basis points. The appreciation of the dollar against the yen and the euro has stopped after a rare acknowledgment of concerns by Japan’s finance minister and a new intervention by the ECB. US PPI data for May may change this in the near future. Cryptocurrency remains under pressure after the collapse of the Celsius Network. OPEC publishes a monthly report on the oil market. Oracle will surprise with its quarterly results. Here’s what you need to know in the financial markets on Tuesday, June 14th.
1. Disorder in the markets at the beginning of the Fed meeting
He opens a two-day meeting amid growing unrest in the markets.
The market consensus changed rapidly to expect the Fed’s target rate to rise by 75 basis points on Wednesday after another painful excess of consumer price inflation in May. Data for the month will be presented at 14:30 and is likely to confirm these expectations, as the consensus provides for another sharp rise in prices by 0.8% since April.
On Monday, the rate of return was the highest in a year, as investors tried to overestimate the risks of rising interest rates. At 3.32%, it is now trading at about the same level as the dollar bill, briefly crossing that level on Monday. The long period when short-term rates are traded above long-term ones has historically been a fairly reliable predictor of recession.
2. Cryptocurrencies are still under pressure after the collapse of Celsius
The cryptocurrency space remains under pressure after one of the largest multifunctional players in the space, Celsius Network, suspended withdrawals amid declining liquidity on Monday.
Prices reached a new 18-month low of $ 20,859 at the start of European trading, and then recovered slightly to $ 22,307 at 13:05. This is still 7.5% less than last Monday in New York. You should still be careful, because market participants know that MicroStrategy (NASDAQ :), a de facto fund with a bitcoin loan, risks getting a loan margin of $ 205 million if the price falls below $ 21,000.
On the other hand, the world’s largest cryptocurrency exchange Binance was able to resume withdrawals after temporarily suspending them on Monday.
3. Shares should open with a rebound
US stock markets will rebound later after the start of the week, which resembled a surrender.
As of 13:10, they increased by 55 points, or 0.2%, while they increased by 0.3% and 0.6%. Estimated cash indices lost from 2.8% to 4.7% on Monday.
The company’s small business optimism index fell from 93.2 to 93.1, the lowest level in 18 months, but lower than in recent months.
Among the stocks that may attract special attention are Oracle (NYSE :), whose quarterly update exceeded expectations last Monday, and Apple (NASDAQ :), which is again under fire. EU antitrust regulators. Meanwhile, cryptocurrencies remain under fire: MicroStrategy fell 5.4% in the previous market, Coinbase (NASDAQ 🙂 – 1.5%.
4. The dollar is suspended after comments from Japan and the ECB
After the Japanese finance minister admitted on rare occasions that he was concerned about her weakness, the European Central Bank hawks resumed fighting to raise interest rates by half a point in July.
The head of the Central Bank of the Netherlands, Klaas Knot, said in an interview with the French daily Le Monde that the ECB is expected to raise by more than 25 basis points in its instructions last week.
At the time, the ECB left the door open for more decisive action in September, but promised to take a “gradual” and “data-dependent” approach over the summer.
5. Oil on the rise; A monthly OPEC and API report is expected
Oil prices rose on the eve of the publication of the monthly report of the Organization of the Petroleum Exporting Countries (OPEC) at 13:45. His forecast for Chinese demand will be particularly interesting, given the new outbreaks of COVID-19 in Beijing and Shanghai, which threaten to provoke a new wave of mobility restrictions.
Earlier, a spokesman for the Beijing government said the city should do everything possible to control the outbreak associated with a particular sea bass.
By 13:15 futures on the stock exchange rose 0.6% to $ 121.62 per barrel, while futures rose 0.7% to $ 123.06 per barrel.