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US pre-open: Futures point to flat open ahead of Fed minutes

By Iain Gilbert

Date: Wednesday 22 May 2019

US pre-open: Futures point to flat open ahead of Fed minutes

(Sharecast News) - Wall Street futures were pointing to a somewhat flat open on Wednesday, with market participants continuing to keep their eyes on the intensifying trade war between Washington and Beijing.
As of 1130 BST, Dow Jones futures were flat at 25,874, while S&P 500 and Nasdaq futures were pointing to losses of 0.02% and 0.10% at the start of trading, respectively.

The Dow looked set to open one point lower after Washington's decision to temporarily curb some sanctions against Chinese telecoms giant Huawei provided some relief and boosted stocks in the previous session.

On Tuesday, tech shares managed to recoup some of their losses from the prior session, but the positive sentiment failed to make its way across to Asian markets overnight, which were little changed.

Some investors were holding out hope that a US-China trade deal can still be achieved, most likely at this year's G20 summit at the end of June.

ThinkMarkets.com analyst Naeem Aslam said: "We had pretty much flat session over in Asia and US futures are trading lower. The focus is on the trade war, and leaders of both countries, US and China, are taking this as a chess game.

"They are being oblivious of the consequences of their actions on the global growth. Their Disney world tells them that the other party is suffering more when the reality is that in a trade war, no one really wins."

In corporate news, retailers Lowe's and Target will release their latest quarterly results before the opening bell.

On the data front, mortgage applications figures for May will be posted at 1200 BST, while minutes from the Federal Reserve's latest FOMC meeting will be released at 1900 BST.

Market participants expect the Federal Reserve to provide some insight into its meeting on 1 May, when policymakers left interest rates unchanged and signalled little appetite to adjust them any time soon.

Elsewhere, the USD hit a two-week high ahead of the Fed minutes - up 0.27% against the GBP at 0.7891p.

However, London Capital Group analyst Jasper Lawler stated the USD was quite simply "the best of a bad bunch."

"Brexit weighs on the pound, growth concerns on the euro, the Aussie and Kiwi are also suffering from the trade war and rate cut forecasts. It's just the yen and its quality as a haven which has been more in demand than the buck."

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