July 26, 2023: Market Overview

The entire world is anxiously anticipating the Fed’s decision today!

Markets and central banks around the globe are awaiting the interest rate decision from the US Federal Reserve, scheduled to be announced at 18:00 GMT.

While the US Federal Reserve is expected to raise interest rates by 25 basis points, the greater focus will be on signals from policymakers regarding possible further increases or plans to pause the rate hikes for an extended period.

BlackRock’s expectations for the decisions of the US and European Central Banks

BlackRock, the world’s largest asset management company, revealed its estimations for the awaited decision of the US Federal Reserve. BlackRock expects the Federal Reserve to raise interest rates by 25 basis points, bringing the primary interest rate to 5.50%.

In the next step, the US Federal Reserve will likely keep interest rates elevated for some time.

BlackRock also addressed the possibility that the European Central Bank may raise interest rates again at its meeting in Frankfurt, Germany, by 0.25%.

Despite market expectations of subsequent interest rate cuts by the US Federal Reserve and the European Central Bank due to the anticipated slowdown in inflation, BlackRock predicts that central banks will maintain their tight monetary policies.

Regarding the monetary policy of the Bank of Japan next Friday, the world’s largest asset management company clarified that it is likely for the Bank of Japan to choose to maintain an accommodative policy to sustain inflation.

Gold rises above $1970.

Gold prices rose during this moment of trading on Wednesday, coinciding with the anticipation of the Federal Reserve’s interest rate decision later in the day.

The US Federal Reserve is expected to raise interest rates by another 25 basis points today, bringing the interest rate to 5.5%, the highest level since 2001.

Gold and Dollar prices now:

Gold futures rose by 0.4% to $1971 per ounce.

Meanwhile, spot gold contracts increased by 0.27% to $1970 per ounce.

On the other hand, the dollar index declined by 0.17% to 100.925 points.

Oil retreats due to the increase in US crude inventories.

Oil prices fell on Wednesday, pulling back from their three-month highs after industry data showed an increase in US crude inventories. However, indications of shrinking global supplies and hopes of China stimulating its economy have limited the losses.

Brent crude futures fell by 32 cents or 0.4% to $83.32 per barrel, while US West Texas Intermediate crude dropped to $79.35 per barrel, down 28 cents or 0.4%.

Nikkei closes lower ahead of the Bank of Japan meeting.

The Japanese Nikkei index edged slightly lower on Wednesday under the pressure of declining automobile and tire manufacturing company shares. Investors were also selling to reap profits before this week’s two-day Bank of Japan monetary policy meeting.

Nikkei declined by 0.04% to close at 32,668.34 points.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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