School Articles

1. Global market overview

If you look at a market screen this morning, you'll see red across the board. U.S. stock futures are firmly in the red. European markets are declining by about 1% in early trading. Nearly every major Asian stock market ended the day with losses.

Investors may be feeling disappointed after the Bank of Japan left its monetary policy unchanged without announcing fresh measures to stimulate the economy. Most commodity prices are slipping, putting pressure on the shares of global mining companies.

For example, shares in Anglo American (AAUKF) are down about 9%, leading the FTSE 100 index lower in London. Crude oil futures are down by 2% to trade around $36.40 per barrel. Prices for precious metals are also declining.

"The Bank of Japan decision to leave policy unchanged was a catalyst for this morning's risk aversion though no-one was looking for any move," noted Kit Juckes, a global strategist at Societe Generale.

2. Pound takes a hit amid heightened Brexit fears

The pound lost almost 1% against the U.S. dollar and the euro on Tuesday after a recent poll showed that a majority of Britons who would vote in favor of a “Brexit” in a referendum scheduled for June 23 on the U.K.’s membership in the European Union.

The ORB poll, commissioned by The Telegraph, found that the “Leave” campaign was backed by 49% of those responding, with 47% preferring the “Remain” decision.

The pound traded down on the uncertainty with GBP/USD falling 0.99% to 1.4160, while EUR/GBP traded up 0.81% to 0.7829

3. Fed kicks off 2-day meeting

Attention now shifts to the Federal Reserve, which begins its two-day policy meeting on Tuesday. The Fed is not expected to take action on interest rates at the conclusion of its meeting at 18:00GMT, or 2:00PM ET, on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.

Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes.

4. Economics and yesterdays’ recap

Market players will digest a series of U.S. economic data on Tuesday while awaiting the conclusion of the Fed meeting. The highlight will be on February retail sales data due at 12:30GMT, or 8:30AM ET. The consensus forecast is that the report will show retail sales fell 0.1% last month, while core sales are forecast to decline 0.2%.

At the same time, the U.S. will also publish data on February producer price inflation as well as the March Empire State Manufacturing index.

Monday market recap: It was an uneventful trading day on Monday.

The Dow Jones industrial average inched up 0.1%, the S&P 500 dipped 0.1% and the Nasdaq was essentially unchanged.