The Fed's announcements are keeping markets cautious. This Wednesday, June 16, 2021 the Eurostoxx 50 opened on a positive note of 4,143.52 points (0.26%), the CAC 40 shows 6,639.52 points (0.35%), the DAX 30 expects 15,729.52 points (0.36%), the FTSE 100 at 7,172.48 points (0.36%), the SMI at 11,921.97 points (0.47%), the AEX at 730.98 points (0.12%) and the BEL 20 at  4,221.19 points (0.01%). The IBEX 35 opens on a negative note of 9,230.70 points with a decline of 0.54%. The decline was also noticeable at the level of the DJIA which stood at 34,299.33 points (0.27%), the Nasdaq at 14,072.86 points (0.71%), the S&P 500 at 4,246.59 points (0.20%), the Nikkei 225  at 29,297.32 points (0.49%)

On the exchange rate side, the change from the close in New York the EUR/USD shows 1.2129 with an increase of 0.01%, the EUR/JPY expects 133.49 (+0.03%) and the USD/JPY remains stable at 110.07.

The CEO of Orange, Stéphane Richard will be heard Wednesday by the Economic Affairs Committee of the National Assembly on the malfunctions that affected the call of emergency numbers in early June. On Tuesday evening, Suez CEO Bertrand Camus announced that he would not lead the group after the sale of part of its activities to Veolia and its acquisition by a consortium of funds. After battling for months against Veolia's proposed takeover bid, Bertrand Camus finally agreed to sign peace with his competitor last month. The agreement reached between the two groups provides for Veolia to take over a set of Suez assets internationally and to hand over the activities in France to a consortium composed of the Caisse des dépôts group, including CNP Assurances, and the Meridiam and GIP funds.

European equity markets are expected to open on a cautious note on Wednesday ahead of the Federal Reserve's (Fed) monetary policy announcements. At 7:40 a.m., the CAC 40 futures contract gained 5.6 points, or 0.08%, according to data from broker IG Markets. The contract on the DAX 30 took 3.5 points, or 0.02%, and that on the FTSE 100 gained 7.7 points, or 0.1%. The Fed's statement is expected at 8:00 p.m. and U.S. central bank chairman Jerome Powell will hold a press conference starting at 8:30 p.m. The institution is expected to leave rates unchanged, but investors are waiting for indications on the timing of a possible decrease in asset purchases, currently $120 billion per month, as well as on the economic recovery and inflation in the United States.

The Fed could signal that it is about to reduce the size of its bond-buying program. Such an announcement would lead to higher bond yields, which in turn would affect the valuation of equities. The market also fears that the U.S. central bank will raise short-term rates earlier than expected, as inflation has accelerated sharply in recent times in the United States. Against this backdrop, Wall Street ended slightly lower on Tuesday in the wake of new records and after the announcement of a larger-than-expected decline in U.S. retail sales in May. The Dow Jones Index (DJIA) lost 0.3% to 34,299 points and the broader S&P 500 Index fell 0.2% to 4,246 points. The Nasdaq Composite fell 0.7% to 14,072.86 points.

In Asia, the main stock exchanges are down on Wednesday. At the end of the session, the Nikkei index lost 0.5% in Tokyo, as did the Hang Seng of the Hong Kong Stock Exchange. The Shanghai Composite Index was down 1%.

 U.S. Treasury yields move little Wednesday morning, as investors await the Fed's announcements. At 7:40 a.m., the yield on the Treasury bond à dix, the market's benchmark, stood at 1.498%, as on Tuesday night. Bank of America fears that the Fed will be forced to act soon, while Oxford Economics points out that monetary authorities, in the United States as in Europe, do not mention inflation much more in their statements than they usually do, which could be a sign that their policy will remain accommodative.

The euro is stable Wednesday morning, at $1.2130, in a wait-and-see market ahead of the Fed's announcements. According to TD Securities, the dollar would benefit from a less accommodative policy from the Federal Reserve. Jerome Powell will likely indicate on Wednesday that discussions on a plan to withdraw asset purchases have begun while insisting that the timing will depend on further substantial progress toward the Fed's targets. Rate projections by members of the monetary policy committee will likely indicate that the first increase in the federal funds rate could come by the end of 2023, TD estimates.

Oil contracts continue to rise on Wednesday and are trading at their highest levels in more than two years, buoyed by market optimism about demand, while Iran's nuclear talks remain under scrutiny. Demand for oil is expected to grow throughout the summer as restrictions related to the health crisis continue to be eased in the United States and many parts of the world.

In according to analysts polled by the Wall Street Journal, crude inventories are expected to fall by 2.9 million barrels and gasoline inventories are expected to have fallen by 800,000 barrels last week. At 7:30 a.m., the August Contract for North Sea Brent was up 61 cents, at $74.50 a barrel, and the July contract for WTI was up 45 cents, at $72.57 a barrel.