US pre-open: Stocks seen flat to lower ahead of FOMC minutes
US futures pointed to a flat to slightly weaker open on Wall Street on Wednesday as investors looked to the release of the latest Federal Reserve minutes.
At midday, Dow Jones Industrial Average and S&P 500 futures were flat, while Nasdaq futures were down 0.2%. Stock markets were open for just a half day's trading on Monday and closed on Tuesday for the Independence Day holiday.
Meanwhile, oil prices tanked as Russia ruled out any proposals to deepen OPEC-led production cuts. According to a Bloomberg report, Russia wants to continue with the current deal and said any further supply cuts would send the wrong message to the market. West Texas Intermediate was down 1.5% to $46.36 a barrel and Brent crude was 1.4% lower at $48.93.
Geopolitical tensions were also at play after North Korea launched its first ballistic missile on Tuesday, capable of reaching the US.
On the data front, factory orders are due at 1500 BST, while the latest minutes from the FOMC are at 1900 BST. Meanwhile, the release of the ADP employment report, widely seen as a pre-cursor to the all-important non-farm payrolls and which would normally be released on Wednesday, has been pushed back to Thursday.
IG analyst Joshua Mahony said: "With the big European data out of the way, the focus now shifts to the US, where the FOMC minutes will bring rate expectations to the forefront of investors’ minds. With the US economic picture beginning to show cracks, there is reason to believe a September rate hike may not be advisable. Thus traders will be keeping an eye out for any potential outlook for quite what the committee wants or needs to see for another hike to come into play."
Konstantinos Anthis at ADS Securities said: "Traders will remain focused on the dollar today ahead of the FOMC minutes' release that is expected to shed more light on the Fed's plans to start unwinding their balance sheet.
"Should the FOMC minutes indicate that the Fed is indeed close to normalising their policy further then the dollar will trade with a positive bias towards Friday's non-farm payroll report. A key level for the US currency appears to be the 113.50 resistance against the Japanese yen; the USD/JPY has gained around 3.5% since its June lows and a move above this barrier will lead the dollar towards the 114.00 medium-term resistance."
The dollar was up 0.1% against the pound at 0.7748, 0.2% higher versus the euro at 0.8832 and 0.3% firmer against the yen at 113.65.