|21 August, 2019

Wednesday outlook: Investors turn cautious ahead of Fed minutes

MSCI's broadest index of Asia-Pacific shares outside Japan flattened after three straight days of gains

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 21, 2016. REUTERS/Andrew Kelly

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 21, 2016. REUTERS/Andrew Kelly

REUTERS/Andrew Kelly
  • Asian shares remain unchanged in early trading
  • Brent prices rise above $60 per barrel
  • Most markets in the region add gains on Tuesday
  • Dollar, gold flatten

Global markets

Asian shares remained mainly unchanged on Wednesday ahead of the US Federal Reserve’s minutes from its last meeting due later in the day.

“Acknowledgment that downside risks have increased with no characterization of ‘somewhat’ could be taken as confirmation that it is likely the Fed makes a larger cut in September,” Morgan Stanley economist Ellen Zentner wrote in a note, according to a Reuters report.

MSCI’s broadest index of Asia-Pacific shares outside Japan flattened after three straight days of gains.

Overnight on Wall Street, the Dow Jones Industrial Average fell 106.46 points, or 0.41 percent, to 26,029.33, the S&P 500 lost 18.06 points, or 0.62 percent, to 2,905.59 and the Nasdaq Composite dropped 41.59 points, or 0.52 percent, to 7,961.23.

Oil prices

Data that showed a larger-than-expected drawdown in U.S. crude inventories boosted oil prices early on Wednesday.

The American Petroleum Institute (API) said on Tuesday that US crude oil stocks fell by 3.5 million barrels to 439.8 million in the week to August 16. Analysts polled by Reuters had expected a decrease of 1.9 million barrels.

Brent crude LCOc1 had risen 13 cents, or 0.2 percent, to $60.16 a barrel by 0136 GMT, after settling 0.5 percent higher on Tuesday.

U.S. crude CLc1 was up 12 cents, or 0.2 percent, at $56.25 a barrel.

Inventory numbers from the government’s Energy Information Administration (EIA) are due at 1430 GMT on Wednesday.

“U.S. inventory data this week will again be a more critical catalyst than usual given that we are nearing the end of peak U.S. driving season,” Stephen Innes, managing partner, VM Markets, said in a note.

Middle East markets

Most stock markets in the region rose on Tuesday.

Saudi Arabia’s index closed 0.3 percent higher as Samba Financial Group rose 2.8 percent, while Riyad Bank added 1.9 percent.

Dubai’s index closed roughly flat, with Emirates Integrated Telecommunications dropping 1.6 percent.

In Abu Dhabi, the index increased 0.8 percent, with First Abu Dhabi Bank gaining 0.7 percent and Emirates Telecommunication Group adding 1.2 percent.

Qatar's index rose 0.9 percent with Qatar National Bank increasing 2 percent and Industries Qatar adding 1.7 percent.

Egypt's blue-chip index also rose 0.8 percent as most companies traded higher. Alexandria Mineral Oils surged 8.7 percent, while Orascom Development gained 2.7 percent.

Kuwait’s premier market index gained 0.6 percent while Bahrain’s index rose 0.4 percent and Oman’s index added 0.5 percent.

Currencies

The dollar was mainly unchanged early on Wednesday.

The dollar index .DXY, which measures the greenback against a basket of six major currencies was flat at 98.210 after shedding 0.2 percent overnight.

Precious metals

Gold prices also steadied.

Spot gold had inched down 0.1 percent to $1,505.42 per ounce by 0116 GMT.

U.S. gold futures were flat at $1,516.20 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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