Five Things Everyone Will Be Talking About Today
It's Fed day. Here are some of the things people in markets are talking about today.
The Fed decision
At 2 p.m. ET the U.S. Federal Reserve will release its policy statement, including its interest rate decision. Only three of the 105 economists and analysts in a Bloomberg survey say the Fed will not raise rates today. Market-based expectations for a 25 basis point hike are at 78 percent this morning, which is near its highest level for this meeting. Assuming the Fed hikes as expected, there will be a lot of interest in what the committee signals about the pace of rate hikes next year.
Stocks higher (ahead of Fed)
Stocks in China and Japan closed higher while European markets are advancing, with the Stoxx Europe 600 Index climbing 0.5 percent at 10:48 a.m. in London after posting its strongest rebound in two months yesterday. PMI data released by Markit Economics today showed that euro-area companies are hiring at the fastest pace in more than four years in a sign that economy may pick up in 2016. S&P 500 futures are also pointing to a higher open.
Bonds steady (ahead of Fed)
Junk bonds, which had been taking a hammering in recent sessions, advanced the most in a year as redemption concerns ebbed. Euro-area peripheral sovereign bonds were higher in trading this morning, with yields on Italian, Spanish, and Portuguese debt falling. The most accurate forecaster of the $13.1 trillion Treasuries market this year, Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC, has said he expects 10-year yields to end 2016 at 2.22 percent, not far from their 2.27 percent level at 11 a.m. in London.
Dollar flat (ahead of Fed)
The dollar spot index was unchanged on the day at 11:15 a.m. London time as investors await the Fed decision. Traders are watching in case there is a repeat of the dollar weakening that followed the start of the 2004 tightening cycle. The British pound weakened against the dollar after data showing slowing wage growth which is weighing on the outlook for a Bank of England rate rise. The Chinese yuan halted its decline in the offshore market on a suspected PBOC intervention.
Not the Fed
Congress reached a deal to end the U.S. oil export ban. The move is viewed as not too significant for the oil market at the moment as the spread between WTI and Brent is not wide enough to encourage exports. Shares in Valeant fell 5.4 percent to $103.64 at 11:10 a.m. London time in New York premarket trading after the company cuts its earning forecast ahead of an investor day.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Donald Trump survives another debate.
- China has something to tell OPEC: Prices have fallen too far...
- ...As Saudi Arabia spends billions to get Asia hooked on its oil.
- The 1990s may be over, but its patents live on.
- For some Americans, a Fed hike could come too soon.
- Here's what 7 years of zero rates have looked like.
- Star Wars spoiler: (Almost) everyone loves it.
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