Fed’s June Meeting Sights Further Tightening of Monetary Policy

market news summary

Most Federal Reserve officials indicated in their June meeting the possibility of further tightening of monetary policy in the near future, albeit at a slower pace than the rapid rate hikes seen since early 2022, according to the minutes of the Federal Reserve meeting released yesterday.

Leading Eurozone stocks declined yesterday, Wednesday, with technology stocks coming under pressure ahead of the release of the minutes of the Federal Reserve’s monetary policy meeting for June, while weak data from the Eurozone and China fueled concerns about global growth.

The Euro Stoxx 50 index closed down 0.9%, recording its worst performance since the end of May, while the broader Stoxx 600 index fell 0.7%.

Dollar index (USDX)

In statements to the U.S. Congress a week after the June 13-14 meeting, Federal Reserve Chairman Jerome Powell said that the Fed has a “long way to go” to reach its 2% inflation target. Recently, the Fed’s preferred inflation gauge saw an increase of only 0.3% in May, despite still reflecting an annual rate of 4.6%.

Investors now expect an 86% chance of the Federal Reserve raising interest rates by 25 basis points, with expectations of rate cuts starting in 2024.

Pivot point: 102.90

Resistance level	Support level
103.15	102.75
103.35	102.45
103.60	102.30

Spot Gold (XAUUSD)

Gold prices declined yesterday, Wednesday, due to the rise in the value of the dollar and the yields of U.S. Treasury bonds following the confirmation in the minutes of the Federal Reserve’s monetary policy meeting for June that interest rates are expected to remain higher for a longer period.

Spot gold prices fell 0.5% to $1,916.49 per ounce, while U.S. futures contracts for gold dropped 0.1% to $1,927.10 at the close.

Pivot point: 1921

Resistance level	Support level
1928	1908
1941	1901
1948	1887

Dow Jones Index (DJ30ft – US30)

U.S. indices closed with slight declines in yesterday’s session following the latest Federal Reserve meeting amid anticipation of important economic data in the coming days.

The Dow Jones Industrial Average declined by 0.4%, or approximately 130 points, after three consecutive sessions of gains, closing below the 34,300 level. The S&P 500 index also dropped by around 0.2% from its highest level in 14 months, while the Nasdaq Composite index decreased by about 0.2% from its highest close in 15 months.

Pivot point: 34515

Resistance level	Support level
34599	34405
34710	34325
34790	34215

US Crude (USOUSD)

U.S. crude oil prices rose by around 3% yesterday, Wednesday, narrowing the price gap with Brent crude in response to production cuts announced by Saudi Arabia and Russia on Monday. Market participants are awaiting U.S. demand data for the week, which included the Independence Day holiday.

West Texas Intermediate (WTI) crude oil climbed $2 above Monday’s closing level, equivalent to a 2.9% increase, to reach $71.79 per barrel at the settlement. Brent crude futures increased by 40 cents, or 0.5%, to close at $76.65 per barrel after rising $1.60 per barrel on Tuesday.

Pivot point: 71.45

Support level	Resistance level
70.70	72.50
69.60	73.25
68.90	74.30

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