Last night’s Fed Minutes showed most policymakers thought the U.S. central bank should begin trimming its $4.5 trillion balance sheet later this year, much earlier than many had expected. But also showed “some participants viewed equity prices as quite high relative to standard valuation measures.” The news overshadowed data showing U.S. private employers added a surprisingly strong 263,000 jobs in March, spurring speculation the official NFP report on Friday would also impress.
Japan’s Nikkei fell 1.4% to its lowest since early December on news the Federal Reserve may start cutting its massive balance sheet earlier than expected.
EUR/USD recovered the ground lost on Wednesday, coming up from lows in the 1.0630 area to 1.0673 following the less-hawkish-than-expected FOMC minutes. Investors will be waiting for the ECB Minutes to be published later today.
Oil ticked lower after the U.S. government reported a surprise increase in crude inventories to a record high. WTI was down 29 cents at $50.86 a barrel, while Brent lost 27 cents to $54.09.
Following the Fed Minutes the Dow posted its largest intra-day downside reversal in 14 months after shedding a gain of more than 198 points. The Dow ended down 0.2% while the S&P 500 lost 0.31% and the Nasdaq 0.58%.
GBP/USD is on the rise after reaching 1.2480 based on positive Services PMI data in the UK. The pair finally appears to have awoken from its recent hibernation.
Later today the markets will keep a close eye on comments from a summit meeting of Trump and Chinese President Xi Junping in Florida.