US equity futures are moving faster than Fed rate decisions; The oil extends its gains

The minute of the Wednesday market

• Global equities were mixed on Wednesday as shares in China hit their highest level in eight weeks as investors took advantage of the pause in the US-China trade war and focused on the Federal Reserve's decision American interest rate.
• Oil prices rise after yesterday's comments by President Donald Trump that OPEC is "tearing up" the world and vowing to impose new sanctions on Iran.
• European stocks are retreating as the euro rises against the dollar and domestic political pressure continues to strengthen the fragile coalition government of Angela Merkel in Germany.
• 10-year Treasury yields tumble to 3.09% as investors prepare for the Fed's third rate hike, but an acceleration of inflationary pressures could signal an acceleration of central bank moves in the months to come up.
• US equity futures are forecasting modest opening rises on Wednesday, as Dow-related contracts suggest a 25-point rebound and those linked to the S & P 500 an increase of 5.25 points.

Snapshot of the market

Global equities traded on Wednesday, as continued Asian market rally boosted sentiment ahead of the Federal Reserve's decision, offset by a weaker start to European trade, with investors continuing to worry about the pace of growth. the impact of the trade war the continuous rise in crude oil prices.

The Fed is closing its two – day rate – fixing meeting in Washington, with markets setting a 25 – basis – point hike at 2:00 pm Eastern time, the third rise of the year that would reach the target range of the central bank between 2% and 2.25%. As crude oil continues to rise, consumer prices should follow, with the impact of $ 260 billion in tariffs starting to be felt.

Faster inflation prospects are also underpinned by the soaring US economy, tighter labor market and faster wages, which should force the Fed to abandon the need for monetary policy "Accommodating" for the first time since the financial crisis. report faster and more consistent rate increases in 2019.

Shares in Asia, however, seemed more focused on the current slowdown in the US-China trade war and a stalled US dollar, which allowed Chinese equities to reach their highest level in the world. eight weeks. ways to open its financial markets to foreign investors and the potential inclusion of some of its large-cap stocks in the FTSE Russel global index series, which are followed by investments of $ 16 trillion dollars from around the world.

The ex-Japan MSCI Asia Index was 0.4% higher in the last trading hours, while the Japanese Nikkei 225 added a similar percentage to 24,033.79 points, the highest level since more than eight month.

Early indications of US equity futures, however, suggest a more cautious tone on Wall Street at the start of trading, with contracts tied to the Dow Jones Industrial Average. indicating a gain of 25 points and those related to the S & P 500 up about 6 points from the closing of last night. Nasdaq Composite futures were seen around 30 points higher.

European investors, too, appeared reluctant to seek gains before the Fed's statement later today, with the Stoxx 600 index sliding 0.05% in the early trading minutes and the FTSE British 100 from 1.3177 after a vote. yesterday at the Labor Party conference that could open the door for legislators to support a second referendum on Britain's exit from the European Union.

The German DAX performance index, however, was 0.25% lower, wiping out almost all of its gains for the quarter, against a backdrop of a booming political climate in Berlin that raised new questions about the chancery Angela Merkel.

Merke's favorite candidate to lead her CDU / CSU coalition colleagues in parliament and her longtime political ally – Volker Kauder – was rejected by party members in favor of Ralph Brinkhaus, a move that suggests the party and Bundestag broadly begin to decline.

In addition to equities, government bond yields also held steady in the Fed's statement, with yields on 10-year US Treasury bonds at 3.091% after hitting their highest level of 3.12% yesterday. domestic consumer confidence has reached its highest level in 18 years.

The US dollar index, which follows the greenback against a basket of six world currencies, was little chanted at 94.12, but oddly near the trough of 93.8 reached last week, suggesting that investors still not favor the dollar despite the growing interest rate gap that it benefits against the euro and the yen.

World crude prices, however, rose at the start of European trade, following comments by President Donald Trump at the UN General Assembly, accusing OPEC of "hijacking" the rest of the world. and above those for the sale of crude oil, which is expected to begin Nov. 4.

Brent Contracts for delivery in November, a global benchmark, were 27 cents higher than their Tuesday closing in New York and moved to a near four-year level at $ 82.14 a barrel.

WTI contracts for the same month, which are more closely related to gasoline prices in the United States, rose only 8 cents to $ 72.36, thanks in part to data from the American Petroleum Institute. fell by 400 million barrels for the week ending September 21st.