Futures Climb, Dollar Drops Ahead of Fed Decision: Markets Wrap

(Bloomberg) — U.S. and European stock futures advanced, while equities traded mixed in Asia on Wednesday as investors took stock of the recent risk-asset rally and awaited clues on the next steps for monetary policy from the Federal Reserve. The dollar resumed its recent decline.

S&P 500 futures rose after the index on Tuesday halted a surge that drove it into the black for 2020, with a drop of 0.8%. European contracts were also higher. Shares dipped in China and Japan. Benchmarks in Hong Kong and South Korea fluctuated, while Australia edged higher. Earlier, the Nasdaq 100 briefly topped 10,000 as Apple Inc. jumped on news it’s preparing to announce a shift to its own main processors in Mac computers. Treasuries were little changed.

After a record-breaking rally that added over $21 trillion to global stock markets, technical indicators suggest a pullback may be overdue. Sentiment toward U.S. equities swung to extreme confidence from equally extreme fear in less than three months.

“It would be no great surprise to see a period of market consolidation now as investors await decisive news on the coronavirus front to determine the direction of the next big market moves,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors.

Investors will turn their focus to the Fed Wednesday, where the central bank will probably use its meeting to shed light on various lending plans without easing further. Officials will also publish their employment and growth targets for the first time since the outbreak.

Elsewhere, oil declined ahead of inventory data on Wednesday. Gold was little changed after Tuesday’s surge.

What to watch this week:

The Fed’s next policy decision is Wednesday. Officials are expected to leave rates above zero.OECD releases its economic outlook Wednesday, a twice-yearly analysis of the economic prospects of member countriesEuro-area finance ministers meet Thursday to discuss the EU’s recovery package and Eurogroup presidency succession.

These are some of the main moves in markets:

Stocks

Futures on the S&P 500 rose 0.6% as of 7:03 a.m. in London. The index dipped 0.8% Tuesday.Japan’s Topix index declined 0.2%.Hong Kong’s Hang Seng added 0.2%.The Shanghai Composite slid 0.4%.South Korea’s Kospi index added 0.4%.Euro Stoxx 50 futures gained 0.7%.

Currencies

The yen was at 107.50 per dollar, up 0.2%.The offshore yuan held at 7.0690 per dollar, up 0.2%.The euro rose 0.2% to buy $1.1360.The Bloomberg Dollar Spot Index fell 0.4%.

Bonds

The yield on 10-year Treasuries dipped to 0.82%.Australia’s 10-year yield slipped three basis points to 1.02%.

Commodities

West Texas Intermediate crude dropped 1.7% to $38.28 a barrel.Gold was at $1,718.76 an ounce, up 0.2%.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.