Stock Futures Little Change Ahead of Fed Rate Decision: Live Updates –

2 hours ago

The 10-year Treasury yield is at a 16-year high

U.S. Treasury yields fell slightly on Wednesday, although the 10-year yield was still hovering around a 16-year peak, as investors awaited the Federal Reserve’s latest interest rate decision and guidance on further policy moves.

At 4:19 a.m. ET, the yield on the 10-year Treasury note fell about a basis point to 4.3567%, reaching levels last seen in 2007. The 2-year Treasury note was most recently more than two basis points lower at 5.0859%. .

Yields and prices have an inverse relationship. One basis point is equal to 0.01%.

Treasurys

3 hours ago

European markets open cautiously higher

European markets opened cautiously higher on Wednesday as global investors await the U.S. Federal Reserve’s latest monetary policy decision.

The pan-European Stoxx 600 index opened 0.2% higher, with sectors spread across slightly positive and negative territory. Health care stocks led the gains, rising 0.9%, while oil and gas fell 0.8%.

—Hannah Ward Glenton

7 hours ago

China leaves key lending rates unchanged

China left its benchmark one-year and five-year lending rates unchanged at 3.45% and 4.2%, respectively, in September.

The People’s Bank of China last cut the one-year LPR interest rate in August from 3.55% to 3.45%, while the five-year LPR was last cut in June from 4.3% to 4.2%.

Hebe Chen, market analyst at IG International, said: “Today’s reluctance from the PBOC highlights the dilemma the central bank continues to grapple with: save the economy or save the yuan.”

It therefore assumes that the central bank’s “inconsistency” will continue, “due to the lack of an established priority.”

The offshore yuan rose slightly to trade at 7.3028 against the greenback. Recently, the currency hit its all-time low of 7.3650 against the US dollar on September 8th.

—Lim Hui Jie

9 hours ago

Japan’s trade deficit fell by two-thirds year-on-year in August

Japan’s trade deficit fell 66.7% in August to 930.5 billion yen ($6.3 billion), compared with the 2.79 trillion yen deficit a year ago.

However, the trade deficit was still larger than the 659.1 billion yen expected by economists polled by Portal.

Both imports and exports to the world’s third-largest economy fell 17.8% and 0.8%, respectively, year-on-year, below Portal expectations of a 19.4% decline in imports and a exports fell by 1.7%.

—Lim Hui Jie

10 hours ago

South Korea’s wholesale inflation rate rises for the first time in over a year

South Korea’s producer price index rose 1% year-on-year in August, marking the first increase in the wholesale inflation rate since July 2022.

This is more than the 0.3% year-on-year increase recorded in July. On a monthly basis, the producer price index rose 0.9% in August, compared to a 0.2% increase in the previous month.

The biggest price increase in August was for agricultural, forestry and marine products, with prices rising 3.6% year-on-year and 7.3% month-on-month

The PPI measures the average change in prices of goods and services sold by manufacturers and producers in the wholesale market.

—Lim Hui Jie

11 hours ago

The Fed’s “dot plot” could be crucial for traders on Wednesday

The Federal Reserve is widely expected to keep interest rates steady on Wednesday, but central bankers will provide an update on their economic outlook with the Economic Outlook Summary, which includes a key chart that traders will keep an eye on.

The so-called “dot plot” depicting the forecast movement in the Fed’s key interest rate and Chairman Powell’s press conference will give investors a clue as to what happens at the November meeting and in 2024.

“I think they will maintain their bias towards higher interest rates and signal that they are willing to raise the key rate further if the data shows that inflation either does not slow as expected or if the labor market remains too tight said Gus Faucher, chief economist at PNC Financial Services Group.

Read more about the meeting here.

—Jeff Cox, Jesse Pound

11 hours ago

The profit situation supports the stock market, says Chris Hyzy

The Federal Reserve’s policy decision on Wednesday will be the first since July 26, which came at the start of second-quarter earnings season.

And while the S&P 500 is down about 2.7% since that day, earnings have largely held up. And that could explain why stock prices are holding up even as interest rates start to rise again.

“The market is resilient because of earnings. That pushes out all the other narratives and all the other stories for now,” Chris Hyzy, CIO at Merrill and Bank of America Private Bank, said on “Closing Bell” Tuesday.

–Jesse Pound

12 hours ago

Higher oil prices are a short-term headache for central banks, but do not pose a threat of high inflation

“[G]“With inflation remaining above target, the recent rise in oil prices is a short-term headache for central banks, which they may well express through a hawkish line,” wrote Simon MacAdam, senior global economist at Capital Economics, In a note to clients Tuesday, the theme was: “Higher oil prices are not a determining factor in inflation.”

London-based Capital Economics doesn’t believe higher crude oil prices will pave the way for a “sustained recovery in inflation” or that central banks in developed economies will respond by raising interest rates or even keeping them high for longer, just because this is the case of the energy markets.

“[W]We do not believe that the recent rise in oil prices will prompt central banks in advanced economies to respond by raising interest rates. “For oil prices to impact the monetary policy outlook, central banks would likely need to see higher and sustained price increases amid robust activity and rising inflation expectations,” MacAdam said.

– Scott Schnipper

12 hours ago

Stock futures open little changed

Futures were quiet on Tuesday evening as trading reopened at 6:00 p.m. ET. Futures for the Dow, S&P 500 and Nasdaq 100 all moved less than 0.1%.

–Jesse Pound