Anticipation of a Federal Reserve meeting keeps bigger gains in check
Wall Street stocks started the week on positive footing to finish higher in a choppy session on Monday ahead of the Federal Reserve’s two-day policy meeting, where the central bank is expected to raise interest rates by another 75 basis points. A rally in Apple and Tesla drove a broader rebound. The Dow Jones Industrial Average jumped 0.64%, the S&P 500 gained 0.69%, and the Nasdaq Composite added 0.76%. Elsewhere, Treasury 10-year yields hovered near 3.5%.
Asian stocks climbed on Tuesday in a bounce from recent losses as risk aversion has abated somehow. However, anticipation of a Federal Reserve meeting kept bigger gains in check. Hong Kong’s technology-heavy Hang Seng index was leading the gains in the region, rising 1.36%, while Australia’s S&P/ASX 200 index added 1.29%. Japan’s Nikkei 225 index rose 0.44%, even as fresh data showed consumer inflation rose to an eight-year high last month. Later in the week, the Bank of Japan is set to decide on monetary policy.
In Europe, equities opened higher, extending recovery from last week’s sell-off. The pan-European Stoxx 600 was up 0.9% in early trade. On the data front, Germany’s August producer prices came in at +7.9% versus +1.6% m/m expected. In individual stocks, shares of TUI Group rose 0.75% after the company said its summer performance is set to close in line with expectations. US stock index futures are also holding higher, with S&P 500 futures now up 0.4% on the day.
Meanwhile, the US dollar demand looks subdued, with bearish bias persisting for the fourth session in a row. The USD index failed to regain the 110.00 figure at the start of the week, struggling to attract renewed buying pressure as traders turned more cautious ahead of the Fed’s two-day policy meeting. Against this backdrop, EURUSD extends its modest upside correction to settle back above the 20-DMA. The euro was last seen flirting with parity, refraining from a more robust recovery.