US futures point to lower open after Fed, Bank of Japan hold rates
U.S. stock index futures indicated a lower open Thursday, following rate decisions by the U.S. Federal Reserve and the Bank of Japan (BOJ).
The Federal Reserve kept rates unchanged at its June meeting. Six members projected only one hike this year, although the median expectation remained two hikes this year. U.S. stocks gave up gains towards the end of the trading day.
Yellen said at her press conference Wednesday that Brexit concerns were a factor in the central bank’s latest monetary policy decision.
“It was fair to say it was one of the factors that factored into today’s decision,” she said at a news conference after the Fed kept interest rates unchanged, as was widely expected.
In Japan overnight, the central bank held rates steady Thursday, sending the yen sharply higher and sparking speculation on whether policymakers would intervene to halt the currency’s rise. By the end of the trading day, the Nikkei 225 closed down 485.44 points, or 3.05 percent.
In Europe on Thursday morning, stocks opened sharply lower with continued jitters over the upcoming referendum on Britain’s membership of the European Union. The Swiss National Bank also kept its benchmark rates on hold at a policy decision on Thursday morning.
“It is impossible to know just much dust will need to settle after next week’s U.K. referendum on EU membership; but if it is at all possible to put this to one side, then the juxtaposition of the Fed and BOJ policy meetings on the 27th and 29th of July respectively are an intriguing prospect, not least for U.S. and Japanese relations,” Neil Mellor, a currency strategist at BNY Mellon, said in a morning note.
“The chances of the FOMC hiking interest rates in holiday-thinned markets on July 27 appear decidedly slim.”
On the data front, initial jobless claims are due at 8:30 a.m. ET as well as the consumer price index, the Philadelphia Fed survey and U.S. current account data. The National Association of Home Builders (NAHB) survey will be released at 10 a.m. ET.
On the earnings front, Oracle and Smith & Wesson are both due to release new figures after the closing bell on Thursday.
Source: CNBC
