The Fed meeting will take place today - 3.5.2023

On Tuesday, the US dollar index fell for the second consecutive day. Nevertheless, it is above the strong support level of 100.7 points. Yesterday's economic data, which turned out to be weak, contributed to the negative trend. U.S. JOLTS Job Openings declined in March. The growth of Factory Orders (+0.9% m/m) turned out to be less than expected. Tonight in the US will be the next meeting of the Federal Reserve. The rate is expected to rise to 5.25% from the current level of 5%. This will be her highest since 2007. Most investors believe that there will be no further rate hike by the Fed. It may even go down at the end of the year. This limits the growth of the US dollar index. In addition to the Fed's decision, important economic data will be published today. April Labor Market Review ADP U.S. Nonfarm Employment Change. It can help refine the forecast of official Nonfarm Payroll data, which will be published on May 5, Friday. ISM Services PMI and other indicators will also be released today. The dynamics of the euro today may be affected by the expected speeches of the representatives of the ECB, as well as the European Union Unemployment. We would like to remind you that a meeting of the European Union Unemployment will be held tomorrow.

Bitcoin quotes have been in the trading range for 6 weeks with approximate borders of $30500-26800. Investors are watching the actions of the US President Biden's administration to develop and approve an energy tax for cryptocurrency mining Digital Asset Mining Energy (DAME) tax. It can be 30%. Recall that for the first time plans for a phased introduction of a tax on cryptomining in the United States were announced in early March of this year.

Yesterday, US stock indices dropped significantly. The main factor for this was the investors' expectations of today's Fed rate hike. Also contributed to the negative macroeconomic data. In addition to all this, there are new signs of a banking crisis in the United States. Shares of PacWest Bancorp fell 27.8%, Western Alliance Bancorporation 15.1% and Comerica 12.4%. Against the backdrop of cheaper oil, shares of oil and gas companies Halliburton Company (-8.3%), APA Corporation (-6.9%) and Schlumberger (6%) collapsed. The fall leaders yesterday were the sectoral indices S&P 500 Energy (-4.3%) and S&P 500 Financials (-2.3%). Among the positive news, we note the opinion of Refinitiv that the total profit of companies from the list of the S&P 500 index decreased in the 1st quarter by only 1.4% y/y. In April, before the start of the reporting season, it was expected to fall by 5.1%. Today, the US will release reports from Qualcomm and other companies.

On Tuesday, oil quotes fell sharply. Now Brent is already trading below $75 per barrel. Treasury Secretary Janet Yellen said the US government could run out of funds if the budget deficit ceiling is not raised by June 1. In addition, investors still do not believe that OPEC+ will implement a second, real cut in oil production from May 1. It was announced in early April. Recall that the planned volume of production cuts should amount to an additional 1.66 million barrels per day (bpd). Since November 2022, OPEC+ has already reduced production by 2 million bpd. Oil quotes are supported by the message of the American Petroleum Institute on the reduction of oil reserves in the US for the week by 3.94 million barrels. The reduction occurred for the 3rd week in a row.

Natural gas in Europe on the ICE Dutch TTF is now trying to break down the $420-580 per 1000 cubic meters range. It has been in it since mid-February. U.S. gas quotes on the Henry Hub also dropped and are around $2.24 mmBtu.