US blue-chips are set to open firmer ahead of the release of the minutes of the most recent meeting of the Fed's policy-making committee.
Two Federal Open Market Committee (FOMC) members are set to speak today, one before the release of the minutes and one after, and the hope is that by the end of the day the market will have a clearer idea of the central bank's level of enthusiasm for pushing through the long-expected interest rate rises.
“While the markets have been insistent for some time that the Fed was too optimistic in its assessment that the economy would warrant four rate hikes this year, it took the central bank a while to come to the same conclusion. The decision at the last meeting to revise its forecasts for hikes this year from four to two was welcomed by the markets but now seems we’re back in a position where the markets aren’t even convinced we’ll see a single rate hike this year,” suggested Craig Erlam at forex trading platform OANDA.
“Such is the conflicting comments coming from the different Fed officials on the economy and the outlook for interest rates that it’s difficult to see where a consensus on a rate hike is going to come from. Especially when the Fed Chair is sounding among the more doveish, playing down the uptick in inflation and playing up the global risks,” Erlam added.
Confusion may reign, but spread betters are confident the market is going to open higher, with the S&P 500 seen opening at just below 2,052, up 10 points, while the Dow Jones is expected to start a little more than 100 points up from last night's close of 17,548.
As leaked yesterday, pharmaceuticals giant Pfizer Inc. (NYSE:PFE) has got cold feet over its takeover of Allergan after the tax benefits of moving its corporate headquarters to Allergan's base in Ireland were diluted by the Obama administration.
Pfizer shares edged higher in pre-market trading.