Acting on global cues, U.S. equities are pointing to a higher opening, although commentary following the conclusion of the Federal Open Market Committee (FOMC) monetary policy meeting later today will be closely watched. Markets will look for confirmation that the Federal Reserve will maintain the median forecast of two interest rate increases this year.
MSCI keeps China out
In Asia, Chinese stocks gained traction, implying that concerns around MSCI’s decision are overstated. MSCI said that it will continue to exclude Chinese A shares from its emerging markets index as Beijing needs to further liberalize its capital markets. European stocks also traded higher as the Fed’s decision is awaited. U.S. stock futures were higher during the premarket session with NASDAQ (INDEXNASDAQ:NDX) Futures up by 0.27% to 4,429.88 and S&P 500 INDEX (INDEXCBOE:SPX) Futures added 0.25% to 2,071.25.
Among key economic events, the U.K. reported a steep drop in its jobless rate to the lowest in a decade in April. The data drove optimism among traders as the British economy appears to be recovering. However, the approaching Brexit referendum on June 23 continues to weigh on sentiment. Investors fear that a decision to leave the European Union will impact both the British economy and trade while it will also have consequences on global market conditions.
Oil remains below $50
Meanwhile, iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) plunged to three-week lows after the American Petroleum Institute (API) reported a sharp rise in U.S. crude stock reserves. Traders are now looking forward to official data due to be released later today to confirm the shift in supply. API had reported yesterday that U.S. crude stocks have increased by 1.518 million barrels during the previous week.
In currencies, the euro trimmed losses against U.S. dollar (CURRENCY:USD) to advance during European hours. Negative German bond yields had sent the euro sharply down against the USD. Resilience in Japanese stocks prevented yen (JPYUSD) from adding gains against the greenback.