Spreadex Market Update
Markets continue to rebound ahead of June’s Federal Reserve meeting
The Dow Jones maintained its status as arguably the most reasonable index at the moment, its mild 0.3% increase a far cry from the more dramatic scenes over in Europe. These steady gains were likely in reaction to the European rebound, as the country’s own afternoon data-dump painted fairly mixed picture of the US economy. The PPI reading hit 0.4% for the first time in 10 months, while the Empire State manufacturing index bounced back out of negative territory to reach a 6.0; however, industrial production slumped to -0.4% from a downwards revised 0.6% last month, with the capacity utilization rate slipping to 74.9% from 75.3%.
All of this is a mere amuse-bouche for this evening’s main event, however, as Yellen and co. serve up the latest Federal Reserve statement. Those woeful non-farm figures at the start of June, alongside the increased market volatility in the run-up to next week’s UK EU referendum, have likely caused the central bank to rule out a rate hike in June. However, questions remain over whether the Fed will act in July (something that may well come down to which way Britain votes on June 23rd), meaning the usual post-statement scrutiny will still be in play later this Wednesday.
Over in Europe the region’s indices only widened their rebound this afternoon. The FTSE rose 1.4%, teasing 6000 in the process, while the DAX and CAC both saw similarly strong gains. A big question still hangs over the sustainability of this rebound, however, with the confidence-knocking potential for something like another poll showing Vote Leave with a significant lead looming on the horizon.
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