Markets remain rangebound ahead of the Fed minutes

Market movements stayed mostly within a narrow range on Wednesday, with equities and commodities seeing slight declines. This trend indicates a wait-and-see attitude among investors as they anticipate the week's key event—the release of the April FOMC meeting minutes.

Notable Market Movements Ahead of FOMC Minutes

Despite the overall range-bound environment, several notable market movements occurred today. The dollar index reached a new six-week high as escalating tensions between the US and Iran heightened expectations for potential rate increases and sustained inflation concerns. Major US indices faced downward pressure, struggling to gain momentum.

The decline in safe-haven demand for precious metals continued, with both gold and silver prices falling to fresh multi-week lows before partially recovering. Bitcoin also struggled to maintain momentum, though its medium-term outlook remains positive. Meanwhile, the EUR/USD extended its losses for a second consecutive day, trading around 1.1590 during European hours on Wednesday.

April FOMC meeting minutes Preview

FOMC rate cut probabilities, as indicated by CME’s FedWatch tool, shifted significantly following a stronger-than-expected April inflation report. Market participants now await the minutes from the US Federal Reserve’s April policy meeting for further guidance on the future path of interest rates. The Federal Reserve maintained its target range for interest rates at 3.50%–3.75% during the April meeting, marking the third consecutive hold. The FOMC statement highlighted that "inflation is elevated, in part reflecting the recent increase in global energy prices."

The April Federal Reserve minutes, scheduled for release on Wednesday at 18:00 GMT, are expected to provide insight into the central bank’s internal discussions on inflation risks stemming from global energy disruptions. The release of stronger-than-expected US CPI and PPI data for April has renewed inflation concerns, prompting financial markets to quickly reassess expectations for Federal Reserve policy. Nevertheless, the market’s response to the FOMC minutes may be subdued, given that the meeting occurred prior to the publication of the latest inflation data.

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