Yesterday saw the release of the minutes from the May meeting of the US Federal Open Market Committee (FOMC). The minutes revealed that most officials agreed that it's appropriate to raise interest rates again "soon”, which is in line with markets expectation of a June hike.
The Federal Reserve also outlined the plan to reduce its Quantitative Easing (QE) program which stands at USD 4.5 trillion. "Most participants judged that if economic information came in about in line with their expectations, it would soon be appropriate for the committee to take another step in removing some policy accommodation." The Dollar has softened following the release of the minutes.
The Canadian Dollar has strengthened, as markets responded positively to the Bank of Canada maintaining their interest rates and releasing a statement on encouraging economic data as well as strength in the oil price.
In Asia, China's credit rating has been cut over fears that growth in the world's second-biggest economy will slow in the coming years. Moody's, one of the major ratings agencies, cut China by one notch. It’s the first time the agency has downgraded the country since 1989. The downgrade may lead to a rise in the cost of borrowing for the Chinese government. Moody’s also changed their outlook for China from stable from negative.
Meanwhile, the UK remains steady ahead of the resumption of Political campaigning today, with the FTSE 250 nearing record highs.
Today’s key data releases include this morning’s second reading of UK Q1 Gross Domestic Product (GDP) figures, expected to show growth of 2.1%. This afternoon brings US Advance Goods Trade Balance and Jobless Claims data.
A man asks a farmer near a field, “Sorry sir, would you mind if I crossed your field instead of going around it? You see, I have to catch the 4:23 train.”
The farmer says, “Sure, go right ahead. And if my bull sees you, you’ll even catch the 4:11 one.”