Traders spooked by Wednesday’s FOMC minutes

Thursday saw a negative open for equity indices, and US benchmarks were down half a percent, while the EU bourses opened circa 1% lower. However, the dip will most likely be temporary, and dip buyers are expected to emerge soon.

The path to economic recovery for the U.S. economy from the Covid-19 outbreak remains highly uncertain, the Federal Reserve warned, according to minutes from its latest meeting, released late Wednesday. That was not very reassuring. Traders sold stocks, bonds, and metals, and the dollar gained afterward.

Moreover, the Fed said it wouldn’t engage in yield control, which was another disappointment for investors. Overall, it looks like the Fed won’t provide any new stimulus unless there is another deterioration in the economic activity or a huge drop in equity prices. 

Later in the day, US initial jobless claims are expected to remain below 1 million for the second week, while continuing claims are forecast to decline to 15 million. 

Meanwhile, members of OPEC+, a group of major oil producers, warned Wednesday that the global rebound in demand was taking place at a slower pace than expected, and a second wave of the Covid-19 virus could do even more damage. However, oil weakened only marginally, and the WTI benchmark was trading near 42.70 USD on Thursday.