Stocks are likely to stay volatile in anticipation of the Fed meeting
US stocks rose on Monday amid growing confidence that inflation has peaked. There is hope among investors that the August US consumer prices report due later today will show a negative reading month-on-month. The Dow Jones Industrial Average gained 0.71%, the S&P 500 rose 1.06% and the Nasdaq Composite added 1.27%. Stocks are likely to stay volatile ahead of the Fed meeting due on September 20-21 when the central bank is expected to deliver its third consecutive 0.75% rate hike.
Asian equities gained on Tuesday ahead of US inflation data. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%, with South Korea’s stocks leading the gains as the Kospi rallied 2.75%. Japan’s Nikkei 225 advanced 0.25% and Australia’s S&P/ASX 200 index rose 0.5% after two reports showed consumer and business sentiment improved last month. The Shanghai Composite Index gained less than 0.1% and the Hang Seng in Hong Kong erased early gains to shed 0.2%.
In Europe, stock markets opened higher to start the session, mirroring the mood seen in US futures. The pan-European Stoxx 600 was up 0.3% in early trade. S&P 500 futures are up 0.4% in early pre-market deals in anticipation of the US CPI data later in the day. The report will set the tone for the rest of the day and the week. Elsewhere, the UK’s August payrolls change came in at +71,000 (to a record 29.7 million) versus +73,000 prior while the jobless rate declined to 3.6%.
In currencies, the US dollar stays pressured on Tuesday, albeit holding around the 108.00 figure after yesterday’s brief dip towards 107.80. The USD index remains on the defensive amid the ongoing profit-taking after last week’s jump to fresh two-decade highs seen just below the 111.00 figure. As such, EURUSD retains a bullish bias, holding above 1.01 on Tuesday. However, the shared currency stays below nearly one-month highs seen around 1.02 at the start of the week.