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The Fed vs the Market

The overnight release of the minutes from this month’s Federal Reserve Open Market Committee meeting show a board at odds with itself, and with the market. Despite clear signals of at least one rate hike this year the USD weakened, driving commodity prices higher and potential supporting local trading today. US stocks rallied, putting investors in conflict with the Fed.

Oil rose for the fifth day in a row after US inventory data showed a surprise draw down on crude stocks. This puts energy stocks in the spotlight again, after yesterday’s market leading performance. Support for gold and base metals could see BHP add to post result gains. Major stocks reporting today include the ASX and Brambles.

In unusual moves the AUD fell despite stronger commodities and the weaker USD. This perception of specific weakness is likely to deter any international investors in the short term. The situation may be eased by the release of employment data this morning if there are substantially more jobs than the consensus estimate of 10,000.

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