Federal Reserve’s Policy Meet And Brexit Concerns Will Drag Down U.S. Equities Today

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The U.S. equities outlook remains subdued today as traders are wary of the looming Brexit referendum as well as the Federal Reserve’s impending decision on policy rate. Shift in sentiment around the Brexit in recent polls has left global markets jittery.

Brexit polls show “Leave” campaign leading

A YouGov poll for The Times showed that survey takers are increasingly favoring the “Leave” campaign as opposed to “Stay”. Close to 50% of people polled supported the decision to leave, while 39% voted to remain.

The Fed’s two-day policy meet is set to begin today, which will influence markets’ trajectory in coming days. Markets are widely expecting status-quo on monetary tightening at the moment. Meanwhile, May retail sales will be yet another key input for the Fed to arrive at a decision as far as American consumer spending is concerned.

U.S. futures trade low

Markets across the globe were jittery today as global growth, and uncertainty persists. Asian indices fell sharply, led by Japan’s equities, after anxiety over Britain’s exit from the European Union and a stronger Yen weighed on sentiment. European stocks also fell steeply during the session as investors took the risk off the table. During pre-market hours, NASDAQ (INDEXNASDAQ:NDX) Futures slipped 0.26% to 4,407.38 and S&P 500 INDEX (INDEXCBOE:SPX) Futures eased down by 0.21% to 2,065.25.

In currencies, U.S. Dollar (CURRENCY:USD) was lackluster against Yen due to the diminished appetite of investors for risky assets. Such an outlook helped gold to peak to four-week highs, but investors remained cautious in placing higher bets for yellow metal. iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) slumped to two-week lows, getting little support from International Energy Agency (IEA)’s positive indication in its latest report. The Agency has asserted that global oil markets are gradually moving towards stability. Despite this, Brent Crude retreated from $50 level during today’s session.

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