Federal Reserve’s Minutes Awaited, OPEC’s Meeting Under the Spotlight

U.S. stocks pared gains but still closed higher on Friday. At the close in NYSE, the Dow Jones Industrial Average rose by 0.69%, the NASDAQ Composite index added 0.47%. The S&P 500 index climbed 0.68%, paring a gain that reached 1 percent amidst intensifying political turmoil in the U.S. News emerged on Friday saying that investigators are focusing on a current White House official as a person of interest in their probe of Russian influence on the election.

The news cut U.S. shares’ gains by half which were boosted by dovish comments from St. Louis Federal Reserve president James Bullard. Bullard on Friday said that the U.S. central bank’s plans for rate increases may be too fast for the economy considering recent signs of weakness in inflation.

In the week ahead, investors will await the Federal Reserve’s minutes of its most recent policy meeting on Wednesday and a handful of Fed policymakers’ public appearances that may provide clues over the likelihood of higher interest rates in the months ahead. The U.S. central bank held its interest rates unchanged after its meeting on May 3 and said that it was on track for two more rate hikes this year given a positive assessment of the U.S. economy.

After Fed’s minutes, U.S. Bureau of Economic Analysis is to report figures on first-quarter economic growth on Friday. The figure is expected to show the world’s largest economy to have grown at a 0.9% annual rate in the first three months of the year. If confirmed, it would be upwardly revised from a preliminary estimate of 0.7%.

Besides the GDP report, this week’s calendar also features U.S. data on new home sales, existing home sales, weekly jobless claims, consumer sentiment and durable goods orders.

Sterling gained ground against the greenback last week, with the pair GBP/USD rising 0.73% to 1.3034 in late trade. The British Pound ended the week with a gain of 1.16% versus its American counterpart. The U.K Office for National Statistics is scheduled to release a second estimate on U.K. first-quarter economic growth on Thursday. The economy is anticipated to grow 0.3% in the January-March quarter and 2.1% on a yearly basis – unchanged from an initial estimate.

The Bank of England’s Inflation Report is due on Tuesday.

Turning to the Euro, the single currency soared to fresh six month highs against the dollar on Friday. The pair EURUSD added 0.95% to trade around $1.1207, contributing to a weekly rise of 2.5 percent. The euro zone is to publish preliminary data on manufacturing and service sector activity for May on Tuesday. Economists expect a modest decline.

Crude oil futures prices notched a four-week high on Friday, up 5% for the week amidst optimism that key producers will extend output cuts beyond an agreed-on June deadline when they meet next week. On Thursday, oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna to decide whether to extend their current production agreement beyond a June 30-deadline.

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