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Stocks, futures rise ahead of Fed meeting; oil up: markets wrap

Treasuries and the dollar were steady.
Image: Go Nakamura/Bloomberg

European stocks edged higher along with US futures as investors waited for the outcome of the Federal Reserve’s policy meeting later Wednesday. Treasuries and the dollar were steady.

Retail and technology shares led gains in the Stoxx Europe 600 Index. S&P 500 futures advanced after the benchmark rose for a third consecutive session on Tuesday. Crude oil extended gains following a surprise drop in US crude stockpiles.

Markets in Asia were mixed, with equities sliding in Korea and China. Australian stocks outperformed.

Investors are looking for catalysts to take markets higher after an impressive global recovery sputtered in the first half of September. The Fed is expected to maintain its dovish stance after adopting a more relaxed approach on inflation last month. That’s shoring up sentiment in the face of risks ranging from US presidential elections and the prospect of a no-deal Brexit.

“Central banks are far from out of ammunition,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note to clients. “Investors should be positioned for the upside in equities.”

Meantime, President Donald Trump said a vaccine shot for the coronavirus could be ready within four weeks. Separately, China’s top bio-safety scientist said one may be available for public use as early as November or December.

Trade issues continue to simmer, with the World Trade Organisation ruling that the US violated international regulations by imposing tariffs on more than $234 billion of Chinese exports.

Here are some key events coming up:

  • Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
  • Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday.
  • Friday sees quadruple witching — the quarterly expiration of futures and options on indexes and stocks — in US markets

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index increased 0.3% as of 8:21 a.m. London time.
  • The Stoxx Europe 600 Index gained 0.3%.
  • Germany’s DAX Index advanced 0.2%.
  • The MSCI Asia Pacific Index advanced 0.4%.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.1%.
  • The euro was little changed at $1.1852.
  • The Japanese yen strengthened 0.1% to 105.35 per dollar.
  • The British pound was little changed at $1.2886.

Bonds

  • The yield on 10-year Treasuries dipped less than one basis point to 0.67%.
  • Germany’s 10-year yield dipped one basis point to -0.49%.
  • Britain’s 10-year yield declined one basis point to 0.206%.

Commodities

  • West Texas Intermediate crude increased 2.1% to $39.10 a barrel.
  • Gold strengthened 0.5% to $1,963.98 an ounce.
© 2020 Bloomberg

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