US stocks hit new all-time highs last Friday. Dow Jones rose 0.1%, while S&P 500 and Nasdaq increased by 0.2% and 0.35%, respectively.
Many expect the market to continue the bullish momentum this week, but the results of the Fed meeting on Wednesday may change the picture. Hence, investors are anticipating what the central bank will say on inflation, which rose 5% year-on-year in May. If the Fed ignores this sharp growth, dollar will decrease because it would mean that the central bank will raise rates no earlier than 2023.
On a different note, G7 countries held a summit over the weekend, during which the members agreed to provide 1 billion doses of COVID-19 vaccine to emerging countries. US will donate 500 million, while UK will give 100 million.
They also discussed which measures to take towards China, but the positions were divided. US wants to take a tough stance against China, while France and Germany want to maintain relations.
The leaders also moved forward the new tax agreement, which requires multinational companies to pay at least 10% tax on profits.
With regards to COVID-19, global incidence dropped to 300,000 on Sunday, thanks to the decrease in India. According to reports, new cases in the country dropped below 70,000 yesterday. Brazil also saw a decline in new cases - to 38,000.
Going back to the markets, Japan indices grew 0.8% this morning, while China indices slipped 0.8%.
Meanwhile, the oil market continued to rise, so Brent is now above $ 73 - 73.05, up by about 0.5%. The main cause is the improvement in the epidemiological situation, which is thanks to the success of vaccinations. There is also a rebound in global demand, which helped a lot.
Now, S&P 500 is at 4.247 points, and is expected to range from 4.280 - 4.210 points. The jump is mainly due to the boom in US consumer optimism, which rose to 86.4 in May.
Dollar also rose on Friday, so the USDX hit 90.50 points. It is projected to close around 90.20 - 90.80 today.
As for USD/CAD, it currently costs 1.2145, but it is expected to fluctuate between 1.2100 - 1.2200. The recent dollar rally obviously weakened the position of loonie in the market.
Conclusion: Investors are anticipating the policy decisions and statements of the Federal Reserve.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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