Wednesday August 17th

17-08-2016

FOMC minutes set to take center stage on Wall Street

U.S. stock index futures were roughly flat on Wednesday, as investors trod cautiously ahead of the much-anticipated release of the U.S. Federal Reserve's July minutes. Markets worldwide will be keeping a close eye on the U.S. on Wednesday, as the Federal Open Market Committee releases the minutes from its July meeting, expected to come out at 2 p.m. ET. Traders will be scrutinizing the report for any indications of a potential interest rate hike by the Federal Reserve in 2016, and further details into what the central bank currently thinks about the U.S. economy. Ahead of the release, Atlanta Fed President Dennis Lockhart said on Tuesday that he believed the U.S. economy would likely be strong enough to handle at least one rate hike before the year was out. Meanwhile, New York Fed President William Dudley said a rate hike in September was "possible." St. Louis Fed President James Bullard is also expected to speak ahead of the release. Aside from the Fed, a bumper set of earnings is set to be released on Wednesday, with Lowe's and Target posting results. Cisco Systems, L Brands, NetApp, Performance Food and CACI International are also expected to release their latest earnings.On the data front, Mortgage Applications fell 4 percent, even with mortgage rates near record lows. Meanwhile, one data point that's expected to cause a stir is the crude inventories data, which could shift oil prices, when it's released at 10:30 a.m. ET. Ahead of the inventory data, crude futures traded lower on Wednesday as investors weighed up how successful potential talks between leading producers would be, when it came to the market's glut problem. U.S. WTI and Brent futures were hovering around $46.40 per barrel and $49.10 respectively, at 8:16 a.m. ET. Looking at international markets, European stocks traded lower, while Asia-Pacific indexes finished roughly mixed overnight. Japanese shares led gains across the board, with the Nikkei 225 index finishing up 149.13 points, or 0.9 percent, at 16,745.64, while the Topix advanced 12.66 points, or 0.97 percent, to 1,311.13. Across the Korean Strait, the Kospi fell 4.01 points, or 0.2 percent, to 2,043.75. In Hong Kong, the Hang Seng index erased earlier gains, slipping 0.29 percent by late afternoon. Mainland Chinese markets ended a tad higher. The Shanghai composite edged up 0.19 point, or 0.01 percent, to 3110.23, while the Shenzhen composite added 0.317 percent, or 6.47 points, to 2043.28. In the previous session, U.S. indexes closed lower, with telecommunications posting solid losses. Gold eased on Wednesday following hawkish comments from U.S. Federal Reserve officials that raised the prospects of a rate increase this year, and more clues on rates are expected later from the release of minutes from the last Fed policy meeting. Spot gold was down 0.14 percent at $1,343.77 an ounce. U.S. gold fell 0.6 percent to $1,349.30 an ounce. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.