Wednesday preview: FOMC releases meeting minutes

The Federal Reserve on Wednesday releases the minutes of its last policy meeting when the central bank decided to keep policy unchanged following a weak jobs report in May.

The Federal Open Market Committee on 15 June unanimously voted to keep interest rates at a target range of 0.25% to 0.5%, citing uncertainty leading up to Britain’s 23 June European Union referendum and a slowdown in the jobs market.

At the time, Fed Chair Janet Yellen said a vote to leave the EU could have consequences for the US economic outlook.

The minutes of last month’s meeting may offer further details behind the Fed’s policy decision and offer clues on what the central bank intended to do with interest rates at the time.

However, the Fed’s stance on policy is likely to have changed since the last meeting in the wake of Brexit.

Danske Bank Markets expects the Fed will keep interest rates on hold for the next year, with the first hike in June 2017, following Britain's vote out of the EU.

“In the US the focus in the coming months is on how the economy is affected by the UK 'leave' vote,” the bank said.

“We expect the US economy to be affected negatively, but the magnitude and duration of the negative shock is unknown and just what we need find out over the next 3-6 months. Hence, all data releases referring to the period before the UK referendum will not be as important as they would otherwise have been.”

Wednesday 06 July

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Balance of Trade (US) (13:30)
Factory Orders (GER) (07:00)
ISM Non-Manufacturing (US) (15:00)

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