U.S. indices closed lower on Wednesday after the Federal Reserve decided to keep its Federal Funds rate unchanged at 2.25%-2.50%, as expected, and reaffirmed its commitment to be “patient” on future rate moves. Shares in the Energy (-2.17%), Materials (-1.84%) and Household & Personal Products (-1.83%) sectors were under pressure. On the economic data front, the ADP reported that the U.S. economy added 275K private jobs in April (estimated +180K, +151K in March). In other news, the final readings of April Markit U.S. manufacturing PMI posted 52.6 (previously estimated 52.4). The ISM manufacturing index dropped to 52.8 in April (expected 55.0) from 55.3 in March. Also, construction spending declined 0.9% MoM in March (estimated to remain flat). Finally, the Federal Reserve decided to keep its Federal Funds rate unchanged at 2.25%-2.5%, as expected, as it reaffirmed its commitment to be “patient” on future rate moves. The Federal Open Market Committee mentioned that overall and core inflation on a 12-month basis have gone down and stated that the economic activity rose at a solid rate. The S&P 500 (2,923.73) stays above both its 20d moving average (2,908.46 – positive slope) and 50d moving average (2,846.13 – positive slope).
European markets are expected to start on a negative note.
Foreign Exchange
The US dollar was bullish against all of its major pairs on Wednesday with the exception of the CHF and the GBP. On the economic data front, MBA mortgage applications declined by 4.3% in week ended April 26th from a fall of 7.3% in the prior week. The ADP employment changed jumped to 275k in April (estimated 180k) from 151k in the previous month. In other news, Markit US manufacturing PMI improved to 52.6 in April (forecasted 52.4) compared to 52.4 a month earlier while ISM manufacturing index reached 52.8 in April (expected 55) vs. 55.3 in March. Also, construction spending declined by 0.9% MoM in March (estimated to remain flat) from 0.7% a month ago. Finally, the Federal Reserve decided to keep its Federal Funds rate unchanged at 2.25%-2.5%, as expected, as it reaffirmed its commitment to be “patient” on future rate moves. The Federal Open Market Committee mentioned that overall and core inflation on a 12-month basis have gone down and stated that the economic activity rose at a solid rate.
The Euro was mixed against its major pairs. The UK manufacturing PMI remained unchanged at 53.1 in April as expected. UK Mortgage approvals were down in March with 62,300 home loans, the fewest since the end of 2017 (vs 64.500 expected).
The Australian dollar was lower against all of its major pairs except for the NZD.
Commodities
After the close of Wall Street, WTI Crude Future (JUN 19) was about flat to $63.56. The contract was below its 20D MA (@ $64.07) and above its 50D MA (@ $60.84). The US Department of Energy reported that, for the week ended 26 April, crude oil inventories increased 9934k barrels compared to the previous week.
Gold was down $7.2 to $1276.3. The precious metal was below its 20D MA (@ $1285) and below its 50D MA (@ $1296).
Copper Future (JUL 19) on Comex was down 11.5c to 278.95c/lb. The contract was below its 20D MA (@ 291.46c) and below its 50D MA (@ 291.67c). In Europe, the London Metal Exchange reported its copper inventories decreased 3250 tons to 225925 tons.