By Geoffrey Smith
Investing.com — The Federal Reserve begins a two-day meeting with markets in disarray, struggling to price in a 75 basis point hike in key interest rates. The dollar’s advance against the yen and euro stalls after a rare admission of concern from Japan’s finance minister and more gawps from an ECB hawk. US PPI data for May could change that in the near term. Crypto remains under pressure in the wake of the Celsius Network collapse. OPEC publishes its monthly oil market report. Oracle surprises on the upside with its quarterly results. Here’s what you need to know in the financial markets on Tuesday, June 14.
1. Markets in disarray as the Fed meeting begins
A two-day policy meeting begins in an increasingly disorderly market environment.
The market consensus quickly shifted to expect a 75 basis point hike in the fed funds target rate on Wednesday in the wake of another painful glut in consumer inflation in May. data for the month is due out at 8:30am ET (1230) and is likely to cement such expectations, with a consensus forecast of another strong 0.8% rise in prices from April.
The benchmark index rose to its highest this year on Monday as investors scrambled to reassess the risks of rising interest rates. At 3.32%, it is now trading at roughly the same level as the note, having briefly traded through that level on Monday. Historically, a sustained period of short-term rates trading above long-term rates has been a reasonably reliable predictor of recessions.
2. Crypto Still Under Pressure After Celsius Collapse
The cryptocurrency space remains under pressure after one of the space’s biggest multifunction players, Celsius Network, faced a liquidity crunch on Monday.
prices of $20,859 in early trading in Europe, before recovering a bit to trade at $22,307 at 6:05 am ET. That’s still 7.5% lower than Monday night in New York. Caution remains the order of the day as market participants know that MicroStrategy (NASDAQ:), a de facto Bitcoin leveraged fund, faces a margin call on a $205 million loan if the price falls below $21,000.
On the bright side, the world’s largest cryptocurrency exchange by volume, Binance, was able to resume withdrawals after temporarily suspending them on Monday.
3. Stocks prepare to open with a dead-cat bounce
US stock markets are set to open with a dead cat bounce later, after a start to the week that reeked of capitulation.
As of 6:10 a.m. ET, they were up 55 points, or 0.2%, while they were up 0.3% and up 0.6%. Benchmark cash indices had lost between 2.8% and 4.7% on Monday.
The small business optimism index compiled by the previous one fell to 93.1 from 93.2, an 18-month low but a smaller drop than seen in more recent months.
Stocks likely to be in the spotlight later include Oracle (NYSE:), whose quarterly update beat expectations on Monday night, and Apple (NASDAQ:), which is again under fire from antitrust regulators in the US. EU. Meanwhile, crypto proxies remain under scrutiny: MicroStrategy down 5.4% pre-market, Coinbase (NASDAQ:) down 1.5%.
4. Dollar advance stalls after comments from Japan and ECB
He paused his rally against the and the , after Japan’s Finance Minister admitted his concerns about its weakness and hawks at the European Central Bank reignited the fight for a half-point hike in interest rates in July.
Dutch central bank governor Klaas Knot told French newspaper Le Monde in an interview that the ECB should rise more than the 25 bps outlined in its guidance last week.
At the time, the ECB had left the door open for more drastic action in September, but committed to a “gradual” and “data-driven” approach over the summer.
5. Grease the edges higher up; OPEC monthly report, API expiration
Crude prices rose ahead of the Organization of the Petroleum Exporting Countries in the oil market at 7:45 AM ET. His forecast for demand outside of China will be of particular interest, given the new outbreaks of COVID-19 in Beijing and Shanghai that threaten to trigger a new wave of mobility restrictions.
A Beijing government spokesman earlier said the city needed to do everything it could to control an outbreak linked to a particular bar.
As of 6:25 a.m. ET, futures were up 0.6% at $121.62 a barrel, while they were up 0.7% at $123.06 a barrel.