The Organization for Economic Co-operation and Development released a disappointing assessment on the global economy this year
as markets awaited US inflation data and crude oil inventories,
the Fed provided its forecasts for the US economy.
However, the Nasdaq hit an all-time high.
Here are the most important things you should know in the financial markets during the day.
Markets await for the Federal Reserve meeting The Federal
Open Market Committee is scheduled to end its two-day meeting later Wednesday, and its statement is to have a significant impact on markets today..
In addition to the Treasury and the Congress, the Federal Reserve has pumped trillions of dollars in incentives to support companies that have been hit hard by the country’s closure following the spread of the Corona virus..
In an article by analysts Nordea Over the past week, analysts stated that “there will be no changes in interest rates. The Fed abandoned the idea of negative rates, and also indicated that the target range will remain unchanged until the economy overcomes current events and is on the right path to maximize recovery.” The return of jobs and price stability These goals are sure to be very difficult to achieve at the present time. ”
Therefore, the focus will be partly on targeting tools such as controlling the yield curve and partly on updated economic forecasts, especially after the surprise employment report released last Friday..
Corona Virus Epidemic Causes Worst Recession in 100 Years The
Organization for Economic Co-operation and Development revised its forecast for today, Wednesday, about the damage that the Coronavirus epidemic has had on the global economy, and issued a disappointing statement.
The Organization for Economic Cooperation and Development summarized its forecasts under the name of “the prevailing dire economic consequences”, stating that the world economy is on the way to the worst recession in 100 years, with the exception of periods of war..
The organization stressed that “the rate of recovery will be very slow, and the crisis will have negative effects in the long run, as it will disproportionately affect the most vulnerable people.”. ”
The organization also added that global growth will decline by 7.6% during the current year 2020, assuming that there is a second wave of corona virus infection. If the world avoids the second wave of infection, there will still be a 6% decrease this year.
These data indicate that the global economy has been subject to more devastation, compared to previous expectations of the organization issued in early March, before the full extent of the crisis becomes clear..
It is also worse than World Bank forecasts issued last Monday, which indicate a 5.2% possibility of contraction this year, according to the bank’s latest report on global economic prospects..
CPI data comes in disappointing to market expectations
The consumer price index for the United States of America was released for the month of May at 8:30 AM ET, and the index is expected to rise by 0.2% during May, compared to its percentage in the same month last year, However, it is expected to decline by 0.1% since April.
The consumer price index decreased by 0.8%, which is the largest decrease since the end of 2008, after the sliding energy prices..
It is worth noting that the consumer price index, with its basic value, which excludes energy and food prices, is expected to rise by 1.3% since last May, but it is expected to decline by 0.1% since April..
However, the index fell 1.2% on an annual basis, contrary to expectations.
Earlier today, Wednesday, the data indicated that the producer price index in China fell to its worst rate in more than four years, as it fell by 3.7% compared to last year, the worst decline since March 2016.
Expectations of the opening of the stock markets on a variation
The US markets are expected to open their trades on a variation during the day, as the Nasdaq Composite Index controlled by technology companies comes in the forefront.
By 6:30 AM ET, futures for the Dow Jones 30 index decreased by 113 points, or 0.4%, the futures for the S&P 500 index decreased by 0.3%, while the futures for the Nasdaq 100 index increased by 0.1.%.
It is worth noting that the Nasdaq ended its trading session at its highest level ever for the second day in a row yesterday, after rising to exceed the record level for the first time for him 10,000. These gains come after technology companies’ shares made impressive gains, one day after the index was the first among Wall Street indices to confirm the emerging market..
Crude oil inventory data
released Crude oil prices fell during the day Wednesday, in light of being affected by the American Petroleum Institute report issued yesterday evening, which indicated the rise in American crude oil inventories by 8.4 million barrels for the week ending June 5.
This differs from the slight decline in stocks expected by the markets, and contributed to increasing concerns about the abundance of supply.
For the time being, eyes are on the official weekly crude oil data released at 10:30 AM ET. Expectations indicate that stocks decreased by 1.74 million barrels for the week ending June 5, compared to a decrease of more than 2 million barrels during the previous week..
Gasoline stocks are expected to decline by 71 thousand barrels, compared to a rise of 2.8 million barrels.
At 6:30 AM ET, West Texas crude oil futures fell 2.7% to $ 37.89 per barrel, while Brent crude fell 2.2% to $ 40.27 per barrel..
It is worth noting that the Australian Institute for Economic and Peace Research has warned today, Wednesday, that the impact of the Corona virus “may lead to the collapse of the shale oil industry in the United States of America, unless oil prices return to their previous levels.”. “