Global markets end the current week in a very difficult situation amid expectations of the result of the Fed's monetary policy meeting, which will clearly have a noticeable impact on them.
Stock markets, primarily in America, nervously fluctuated over the week, and actually remain in a consolidation phase. The picture was also similar in the currency markets and was characterized by sharp surges of price growth, then decline. The only beneficiary of the situation around production and transportation was crude oil, whose prices received strong support amid hurricanes in the Gulf of Mexico, which hindered production, problems with the supply of oil through the Persian oil pipeline, and an increase in the volume of purchases of Russian oil by China before the expected cold winter in the northern hemisphere of our planet.
There is no doubt that the main reason for everything that was observed during the week is the expectation of the Fed's final decision on monetary policy, which will take place on September 21-22 and will certainly have a strong impact on the dynamics of all markets.
The fact that this particular event is major was fully demonstrated by the markets' reaction to the publication of such important economic statistics as US consumer inflation, as well as a number of other influential indicators, such as retail sales volumes and the number of initial applications for unemployment benefits.
If we pay attention to the picture of the crude oil market, it is very likely that the quotes will have to make a downward correction after the recent strong price growth with the normalization of oil production in the United States and transportation via the Persian pipeline. The main negativity is a clear slowdown in the growth of the world economy and, as a result, a likely decline in oil consumption. But this does not mean that a strong price drop will be observed. The reason for this may be the expectation of a cold winter in the Northern Hemisphere at the end of this year.
We believe that the general mood of investors will continue today and this is primarily due to their clear reluctance to take risks before the important event.
Forecast of the day:
The price of WTI crude oil is trading below the level of $ 72.35 per barrel. A price correction is expected to the level of $ 71.00.
The EUR/USD pair may gain support amid the strong increase in the EU's consumer inflation. But due to the obvious reluctance of investors to be active before the Fed's decision on monetary policy, its growth will be limited. It may rise to the level of 1.1815 after breaking the level of 1.1775.