Stocks drop after FOMC minutes

By Peter Bukov|

Published: July 08 2021, 08:45 GMT+0

Stocks drop after FOMC minutes

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Thursday saw some strong selling in US equities, pushing them 1% lower as the FOMC minutes confirmed a slightly hawkish tone left from the latest Fed’s decision.

On taper, the minutes read: “Various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had anticipated at previous meetings in light of incoming data.”

However, the Fed still pledged that monetary policy would remain ultra-loose for a long period of time.

The USD strengthened somewhat after the minutes, but gains were erased today, with the USDJPY pair plunging below the important 110 level. 

Yields are also in a freefall, and the 10-year yield is below 1.3%, falling below the long-term uptrend line, ending the bull market in yields. 

Later in the day, the European Central Bank is set to announce the outcome of an 18-month strategy review, followed by a news conference hosted by President Christine Lagarde.

Additionally, US jobless claims are due, with initial claims expected to improve further to 350,000 from 364,000 in the previous weeks. Continuing claims are also seen declining.