Wednesday preview: FOMC meeting minutes under microscope

Minutes from the Federal Reserve’s April policy meeting may offer hints on Wednesday about the central bank’s next change to interest rates.

Analysts will be closely scrutinising the minutes of the 26-27 April meeting for signs of whether the Fed will meet expectations to keep interest rates unchanged in June.

San Francisco Federal Reserve Bank President John Williams on Monday said he believes two to three interest rate hikes this year “makes sense” as the US economic outlook is “definitely looking good”.

"I view the balancing act as very similar to the balancing act that kind of led to the first rate increase... We have to be making the decision. Do we want to wait a little longer or act now?" Williams said to reporters after a speech at the Sacramento Economic Forum.

His comments follow hawkish remarks from fellow Fed officials including Esther George and Eric Rosengren. George said interest rates are currently too low while Rosengren said the economy appears strong enough for the Fed to resume increases.

“The rhetoric from a number of Fed officials recently has been that June is a ‘live’ meeting and so another rate hike is possible and yet the markets simply aren’t buying it,” said Craig Erlam, senior market analyst at Oanda.

“It will be interesting to see whether the minutes from the last meeting support this idea or put the final nail in the coffin. With the implied probability of a hike in June now down to 4%, it would appear investors are anticipating the latter.”

Meanwhile, UK jobs data from the Office for National Statistics will also be in focus on Wednesday with analysts expecting no change to employment or the jobless rate in the three months to March.

Company-wise Burberry reports its full year results. The City expects the luxury fashion retailer’s adjusted pre-tax profits to fall 7.5% to £422m, due to a challenging year that involved economic woes in China, one of its key markets.

Wednesday 18 May

INTERIMS
Countryside Properties , Patisserie Holdings

INTERIM DIVIDEND PAYMENT DATE
Dunedin Enterprise Investment Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (EU) (10:00)
Crude Oil Inventories (US) (15:30)
FOMC Interest Rate Minutes (US) (19:00)
MBA Mortgage Applications (US) (12:00)

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Burberry Group, Burberry Group, HICL Infrastructure Company Ltd, SABMiller, SSE

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Norish Units

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Claimant Count Rate (09:30)

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Seplat Petroleum Development Company (DI)

Q1
New World Resources A Shares, Plaza Centers NV