Fed meeting will take place today - 26.1.2022

On Tuesday, the US dollar index rose for the 2nd day in a row. Investors are looking forward to today's meeting of the Federal Reserve and any statements about its future monetary policy. According to CME FedWatch, there is a 95% chance that the rate will remain at the current level of 0.25%. However, at the next Fed meeting on March 16, the rate may be raised by 0.25% or even 0.5%. The probability of this event is estimated at 89%. There will be no Fed meetings in February. Expectations of tightening its monetary policy this year are strengthening the US currency this year. A positive factor for the US dollar was the weakening of the euro against the backdrop of political risks of aggravation of relations between NATO, Ukraine and Russia. In addition, we can note a good increase in the American consumer confidence indicator CB Consumer Confidence in January. Recall that in addition to the Fed, there will also be a meeting of the Bank of Canada's (BoC) today. Rate change (0.25%) is also not expected.

Bitcoin is slightly more expensive today for the 3rd day in a row. Its rate dropped significantly on Friday when the Bank of Russia proposed to ban mining and operations with cryptocurrencies in the country. Russia ranks 3rd in the world in terms of mining and produces approximately 11% of bitcoins. According to various estimates, this brings Russian businessmen more than $3 billion a year. Accordingly, quite a few influential people have criticized the mining ban. There is a possibility that the proposal of the Central Bank of the Russian Federation may not yet be approved by the Russian government. Note that restrictions on the global circulation of cryptocurrencies are supported not only by the central banks of individual countries, but also by international organizations. Thus, the International Monetary Fund (IMF) called on the authorities of El Salvador to cancel the recognition of bitcoin as a means of payment in this Latin American country.

Yesterday, US stock indices continued to decline. Investors believe that the Fed's rate hike will increase corporate leverage. Meanwhile, the quarterly reporting season is not bad at all. Refinitiv even raised its forecast for S&P 500 total earnings growth to +24.1% from +22.4% previously expected. Yesterday, American Express shares soared almost 9% thanks to good reporting and cheaper bitcoin. Cryptocurrencies can be competitors for payment systems and banks. Today, the publication of financial results for the 4th quarter of 2021 is expected from such large companies as Tesla, Abbott Labs, Intel, AT&T, Boeing and others. Today in the US economic data will be released on the residential real estate market for December: New Home Sales.

Today, oil prices are rising for the 2nd day in a row. This is facilitated by political risks around NATO, Ukraine and Russia, as well as the conflict in the Middle East - in Yemen and the United Arab Emirates. US President Joe Biden said that additional economic sanctions could be imposed on Russia. Meanwhile, Russia ranks second in the world in oil exports. Saudi Arabia is in 1st place, and Iraq is in 3rd place. Oil quotes were also supported by data from the American Petroleum Institute on the reduction of US stocks for the week by 0.87 million barrels. Note that the political crisis between Ukraine and Russia yesterday caused a rise in price of wheat. Russia ranks 3rd in the world in wheat production, and Ukraine is 8th. In world wheat exports, Russia ranks 1st, Ukraine - 5th.