Sentiment remains fragile ahead of the FOMC decision

Sentiment remains fragile ahead of the FOMC decision
There have been no significant news or big movements so far on Tuesday, and markets traded in tight ranges as everyone is getting for tomorrow's FOMC decision.
From COVID news, a study released late Monday from the University of Oxford showed that two doses of established Covid-19 vaccines are substantially less effective at combating Omicron than previous coronavirus variants, emphasizing the need for a booster shot.

On the other hand, the Omicron variant is still considered less dangerous than the Delta variant.

Later today, the US PPI indices are due, expected to continue rising. The yearly change will likely soar to 9.2%, up from 8.6% previously, while the monthly change is expected to stay unchanged at 0.6%. The core PPI index is seen rising to 7.2% year-on-year, up from 6.8% in October. 

Today marks the start of the two-day FOMC meeting. The Fed is widely expected to fasten the tapering process, ending it sooner than anticipated. Additionally, the following statement is also likely to be hawkish, considering the ongoing surge in inflation. 

The market prices the first rate hike in June, with two more rate hikes forecast in 2022. When compared to the ECB, which decides about monetary policy on Thursday, the divergence is enormous, possibly driving the EURUSD pair below the 1.10 threshold soon.

Stocks corrected lower yesterday as nervous investors sold ahead of the Fed meeting. Nevertheless, US indices remain close to their all-time highs. EU bourses have also stalled below their record levels, following US equities lower. 

Precious metals look poised to another leg lower. So far, silver was seen above 22 USD, and gold was trying to defend 1,780 USD.
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