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Equities are higher in Europe while currencies and government bonds are holding steady as investor focus turns squarely to the Federal Reserve’s decision on US interest rates.
In the run-up to it, the dollar index is 0.1 per cent higher, leaving its gain for the year-to-date on the brink of 1.9 per cent. The yield on the 10-year US Treasury remains near 3 per cent, up 1 basis point at 2.9663 per cent as investors sell the debt. It started 2018 at 2.43 per cent.
Recent data have pointed to signs of renewed strength in the US economy but the market will be focused on the US central bank’s projections and any sign of angst about a trade war.
Investors broadly expect the Fed to lift its target range for the short-term benchmark interest rate by 25 basis points to 1.75 to 2 per cent later on Wednesday.
Investors are also looking ahead to an interest rate decision from the European Central Bank on Thursday.
Equities
London’s FTSE 100 is up 0.2 per cent, as is Frankfurt’s Xetra Dax 30, with both indices bouncing up off earlier lows. The Europe-wide Stoxx 600 is 0.3 per cent stronger and Italy’s FTSE MIB continues to outperform — up 0.8 per cent on the session — after reassuring comments on fiscal policy from the new government’s finance minister. It is up 4.5 per cent over the week.
According to futures trade, New York’s S&P 500 will tick up 0.1 per cent in opening trade.
Hong Kong’s Hang Seng index fell 1.2 per cent, while mainland China’s CSI 300 fell 1 per cent.
Tokyo’s Topix held positive territory, up 0.4 per cent.
Forex and fixed income
The pound is down 0.4 per cent at $1.3323 and a session low after UK inflation data failed to rise from year-lows, even with the effect of rising fuel prices. Against the euro, the pound is also 0.4 per cent weaker — with £0.8812 required for a unit of the shared currency.
The euro is flat overall at $1.1740.
The yield on 10-year German Bunds is down 1.1 basis points at 0.479 per cent.
Commodities
Oil prices are lower. Brent crude, the international benchmark, is down 0.6 per cent at $75.38 a barrel while West Texas Intermediate, the main US price, is 0.7 per cent weaker at $65.90.
Crude has fallen after data showed rising Opec production and higher US stocks and ahead of next week’s meeting of the oil exporters’ organisation, at which it could agree to raise output.
Gold is down 0.1 per cent at $1,295 an ounce.
