Global Markets Down On More Hawkish Fed, Trump Obstruction Investigation

(Kitco News) - World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

The news reports late Wednesday that special prosecutor Robert Mueller will investigate U.S. President Donald Trump for obstruction of justice has thrown more uncertainty into the world marketplace.

Gold prices are solidly lower in pre-U.S.-session trading Thursday. The yellow metal is pressured by the hawkish reading the marketplace gave this week's FOMC meeting.

The Federal Reserve on Wednesday afternoon raised U.S. interest rates by 0.25%, as expected by most. The Fed said it will also fairly aggressively reduce its big balance sheet of government securities in the coming months. The FOMC statement also said U.S. inflationary pressures have eased a bit recently. However, Fed Chair Janet Yellen at her press conference sounded a more hawkish tone on inflation. After digesting the FOMC statement and Yellen's remarks, the marketplace deemed this latest Fed meeting as more hawkish on U.S. monetary policy.

The Bank of England held its monetary policy meeting Thursday and left interest rates unchanged. The Bank of Japan also held its regular monetary policy meeting Thursday. The Swiss National Bank left its monetary policy unchanged at its meeting. The Hong Kong Monetary Authority raised its key interest rate by 0.25% on Thursday.

The key "outside markets" on Thursday morning see Nymex crude oil futures prices slightly lower, following another bearish weekly U.S. energy stocks report Wednesday. The oil market bears have the firm overall near-term technical advantage as prices trade well below $50.00 a barrel. Meantime, the U.S. dollar index is higher and is supported on the more hawkish Fed tone on U.S. monetary policy. The greenback bears hold the firm near-term technical advantage.

U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export prices, the Empire State manufacturing survey, the Philadelphia Fed business survey, industrial production and capacity utilization, the NAHB housing market index, and Treasury international capital data.

By Jim Wyckoff, contributing to Kitco News; [email protected]
Follow Jim Wyckoff @jimwyckoff for breaking news.