TOPICS DISCUSSED IN THIS MARKET BRIEFING:

• European stock markets finish in the green before the Fed
• Wall Street ends lower after Fed comments
• Chart of the day – USD/CHF: a bullish divergence

EUROPEAN STOCK MARKETS FINISH IN THE GREEN BEFORE THE FED

European stock markets ended higher on Wednesday, buoyed by new records on Wall Street for the S&P 500 and the Nasdaq Composite, ahead of the release of the minutes of the Federal Reserve's latest meeting.

The Fed's measures to mitigate the damage caused by the coronavirus crisis have helped push riskier assets to unprecedented levels while reducing demand for safe havens and the dollar.

The day was once again poor in indicators with, in the euro zone, only the confirmation of inflation at +0.4% over one year in July.

British inflation accelerated to 1% last month, the highest since March, after +0.6% in June.

This Thursday, it will be the minutes of the European Central Bank that will be in the spotlight as well as the figure of weekly jobless registrations in the United States.

Thus, the CAC 40 index rose 0.79% to 4,977.23 points. The Footsie gained 0.58% and the DAX 30 advanced 0.74%.

WALL STREET ENDS LOWER AFTER FED COMMENTS

Wall Street ended lower on Wednesday a session marked by new records of the Standard & Poor's 500 and the Nasdaq, the minutes of the last meeting of the Federal Reserve having revived fears related to the fragility of the economic recovery against the backdrop of the pandemic.

On Wednesday, the indices were trading slightly higher until the minutes of the last meeting of the Fed's monetary policy committee were released during the session. Several central bank officials consider the recent recovery in the economy and employment fragile and uncertain while ruling out measures such as capping Treasury yields.

In particular, the meeting stressed that the uncertainty surrounding the economic outlook remained very high, as the trajectory of the economy depended heavily on that of the virus and the public sector's response to it, i.e. the adoption of a new aid plan.

However, the White House and Congressional Democrats have been discussing for several weeks new measures to help businesses and households, as well as local authorities and schools, without reaching an agreement.

Moreover, "the labor market is far from a full recovery," even after the significant number of job creations observed in May and June, stressed the members of the Fed's monetary committee.

The day's session was also marked by Apple, which became the first American company to surpass the $2 trillion mark on the stock market before losing some ground.

As a result, the Dow Jones lost 0.31% to 27,692.88 points. The Nasdaq fell 0.57% and the S&P 500 dropped 0.44%.

Otherpoints on financial market news

• forex

In July, the greenback suffered its largest monthly decline in a decade (-4.15%), which was neglected due in particular to concerns about the pandemic and the economic recovery in the United States, the trade dispute between Washington and Beijing and the lack of consensus on new support measures.

The euro fell below $1.19 after a more than two-year high against the U.S. currency hit Tuesday at 1.1965.

• petroleum

Oil prices have long been on a downward trend, and oil prices have returned to virtual equilibrium after EIAd's announcement of a smaller than expected decline in crude inventories in the United States last week (-1.6 million barrels against -2.67 million expected) and a sharper than expected decrease in gasoline inventories.

U.S. light crude WTI gained 0.14% to $42.95 a barrel and North Sea Brent cut its losses and fell 0.11% to $45.41.

Economic calendar of the day:

CHART OF THE DAY – USD/CHF: END OF CONSOLIDATION

After a real plunge for several weeks, the US dollar could regain some height in the coming sessions. First of all, the candlestick of the day before is characterized by a flowing and impulsive candle, indicating a buying force. In addition, this pattern takes the form of a bullish swallow.

Then, the RSI indicator confirmed a bullish divergence, so the pair should mark a short-term low point and attempt a technical rebound. The first level to cross is that of 0.9185 and then go for the final target towards the 50-period moving average at 0.9290.