GLOBAL MARKETS-Stocks fall, dollar eases broadly as investors await Fed


US stocks fell in early trading


The dollar is weakening across the board


All eyes on the Fed; An increase of 75 bp is expected

(US early trading updates, date changes, previous LONDON)

By Caroline Valetkiewicz

NEW YORK, NOVEMBER 2 (Reuters) – Global stock indexes fell on Wednesday and the dollar edged lower against other major currencies ahead of another aggressive rate hike expected by the U.S. Federal Reserve.

US Treasury yields were little changed.

The US central bank is expected to announce a fourth three-quarter rate hike as part of its efforts to reduce inflation. The Federal Open Market Committee (FOMC) policy statement will be released at 14:00 EDT (1800 GMT).

The Fed raised its benchmark overnight rate from near zero in March to the current range of 3.00% to 3.25%.

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A key question for some market participants is whether the Fed will also signal it may slow further rate hikes in a so-called “dovish pivot.”

Analysts say uncertainty over how economic data will develop means the pivot of the distortion may still be some way off.

Data on Tuesday showed US private payrolls rose more than expected in October. That followed a report on Tuesday that showed monthly U.S. jobs growth, which also supported the Fed’s case for remaining hawkish. “The typical calm before the FOMC storm is what we’re seeing this morning, across all asset classes, really,” said Michael Brown, head of market intelligence at London-based payments firm Caxton.

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In currencies, the euro rose by 0.11% to $0.9885 against the dollar, while the dollar fell by 0.8% to 147.03 yen against the Japanese yen.

A Reuters poll showed currency strategists believe the dollar’s retreat is temporary.

The Dow Jones Industrial Average fell 93.27 points, or 0.29%, to 32,559.93, while the S&P 500 lost 17.14 points, or 0.44%, to 3,838.96. and the Nasdaq Composite fell by 71.06.8% or 71.06.5% or 0.09%.

The pan-European STOXX 600 index lost 0.10%, while MSCI’s benchmark of shares worldwide lost 0.21%.

Treasury yields were little changed in the hours leading up to the Fed news.

The benchmark 10-year Treasury yield was above 4%, while the two-year yield, which typically moves in line with interest rate expectations, was above 4.5%.

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U.S. crude was recently up 0.44% at $88.76 a barrel, while Brent was at $95.03, up 0.4% on the day.

Earlier, upbeat statements from Chinese regulators on policy support and growing expectations among investors to ease strict COVID-19 measures boosted sentiment in its market.

Bank of Japan Governor Haruhiko Kuroda said on Wednesday that a change in the central bank’s yield curve control policy, which has helped weaken the yen, could be a future option.

(Additional reporting by Saqib Iqbal Ahmed in New York and Dhara Ranasinghe in London; Editing by Kim Coghill, Mark Potter and Alex Richardson)


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