Stock Traders Brace For FOMC Minutes

FOMC Minutes DueLooking ahead today, the main focus will be on the release of the latest FOMC meeting minutes. USD volatility has been the dominant market theme in recent weeks, putting a great deal of attention on tonight’s minutes.  On the back of the recent weaker-than-forecast October CPI reading, the minutes will have potentially lost a little relevance though there is likely asymmetrical risk here.Inflation ImpactGiven the sell off we’re seeing in USD and the prevailing narrative that the Fed will refrain from any further tightening, any dovish leaning details are likely to add fuel to the fire, sending USD lower. On the other hand, any hawkish leaning details are likely to be written off against that weaker CPI print. With this in mind, USD shorts look likely to prevail, keeping risk assets well supported near-term.Keep An Eye On Data TooThe rally in risk appetite has seen the S&P trading sharply higher this month. The index has gained more than 10% off the November lows. Now trading back inside the bull channel which has framed the majority of 2023 price action, the outlook remains bullish while the dovish Fed narrative remains in play. As such, incoming US data will also be closely watched by traders with any further data weakness likely to reinforce the ‘Fed on hold’ narrative, keeping stocks well supported. Ahead of the minutes tonight, traders will get a look at the latest existing home sales data which is forecast to have softened slightly last month.Technical ViewsThe rally off the 4153.50 lows has seen the market trading firmly higher. Price recently broke back above the bull channel lows and the 4396.25 lows. With momentum studies bullish, the focus is on further upside while price holds above this support region, putting 4627.50 in view as the next objective for bulls.