Investors await additional Fed commentary on the monetary policy - 26.5.2021

On Tuesday, the US dollar index dropped for the second day in a row. Nevertheless, for 3 weeks now, it has been trading in a neutral range near the psychological mark of 90 points. Investors are trying to figure out whether the Fed will tighten monetary policy amid high inflation and the recovery of the American economy due to the lifted quarantine thanks to massive COVID-19 vaccinations. This is keeping the US dollar rate from falling on a large scale so far. The heads of the regional branches of the Chicago Fed Charles Evans and San Francisco Mary Daly on Tuesday expressed their approval of the current monetary policy. Thereafter, the U.S. The 10-Year Treasury Bond dipped below 1.6% per annum, almost to its lowest since early May. The US dollar has tumbled below the 6.4 support level against the Chinese yuan, or to its lowest since June 2018. As expected, the Reserve Bank of New Zealand (RBNZ) made a positive statement following its meeting. It kept the rate (0.25%) but hinted at the possibility of raising it in September 2022. This strengthened the New Zealand dollar rate.

On Tuesday, the US stocks decreased. Negative macroeconomic news contributed to this. CB Consumer Confidence for May and sales of new residential houses in April were worse than expected. However, some investors believe in the potential for growth in the quotations of American stocks. Since the beginning of 2021, the S&P 500 has gained 12%. Refinitiv predicts that the total profit of companies from the S&P 500 list for the whole of 2021 could increase by 35.6%. US stock index futures are trading higher this morning. The US is not expected to publish important economic information, but there will be speeches by representatives of the Fed.

World oil prices were almost unchanged yesterday. Investors are awaiting new information from the negotiations on lifting Western sanctions from Iran and the conclusion of "nuclear deal". It implies Iran's abandonment of the uranium enrichment program and control of its nuclear industry by the International Atomic Energy Agency (IAEA). The next round of talks between Iran and Western countries is now taking place in Austria. The lifting of sanctions will lead to an additional flow of Iranian oil to the world market from 1 to 2 million barrels per day. The independent American Petroleum Institute announced a decrease in the US oil reserves for the week by 439 000 barrels. Goldman Sachs Bank predicts an increase in oil prices to $80 per barrel in the Q4 of 2021 due to the recovery in global demand after the end of the COVID-19 epidemic. In their opinion, supplies of Iranian oil are unlikely to interfere with this.