Investors are looking for catalysts to take markets higher after the impressive recovery in global stocks from March lows sputtered in the first half of September. The Fed is expected to maintain its dovish stance at its policy meeting Wednesday after earlier saying it will shift to a more relaxed approach on inflation. Central bank stimulus has been shoring up sentiment in the face of risks from the pandemic, the U.S. presidential election and the possibility of a no-deal Brexit.
“Given the volatility we have seen in the stock market in the last couple of weeks -- as more evidence of some bubble-like characteristics in the exposure to growth stocks has been revealed -- it’s hard to see a new, strong rally ahead of the US election,” said Chris Iggo, chief investment officer of core investments at AXA Investment Managers.
Trade issues also continue to simmer. The World Trade Organization ruled that the US violated international regulations by imposing tariffs on more than US$234 billion ($318.46 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 dipped 0.1% as of 9:02 a.m. in Tokyo. The gauge increased 0.5% on Tuesday.
- Japan’s Topix index fell 0.1%.
- Australia’s S&P/ASX 200 Index rose 0.3%.
- South Korea’s Kospi index gained 0.1%.
Currencies
- The yen traded at 105.40 per dollar.
- The offshore yuan was at 6.7805 per dollar.
- The Bloomberg Dollar Spot Index was flat.
- The euro was at US$1.1844, little changed.
Bonds
- The yield on 10-year Treasuries ticked down to 0.67%.
- Australia’s 10-year yield remained at 0.86%.
Commodities
- West Texas Intermediate crude rose 0.6% to $38.50 a barrel.
- Gold was at US$1,953.62 an ounce, little changed.
