US equity futures are trading just below all-time highs, led by the tech sector, as global markets trade higher ahead of the Federal Open Market Committee (FOMC) meeting. As of 8:00am ET, S&P futures are up 0.4%, rising for a seventh consecutive day. European stocks are also broadly higher, while Asian markets are mixed and Japan stocks tumbled 2% after reopening from holiday and being dragged lower by the surging yen. The USD remains under pressure, dropping for a fifth consecutive session, falling 0.1% to the lowest since January.
In premarket trading, Microsoft gains +2% after it raised its quarterly dividend 10% and announced a new $60 billion stock repurchase program. Intel is up +6.5% after it announced it will make custom AI chips for Amazon AWS. Other notable premarket movers include AppLovin, HP Enterprise, Shopify, SolarEdge Technologies, Torrid Holdings, and Viasat.
On the eve of the Fed’s first rate cut in more than four years, investor attention will home in on US retail figures due later. The numbers will feed into a debate raging across markets over whether the Fed will ease by 25 basis points, or by double that amount.
Meanwhile, optimism around Fed rate cuts has boosted investor sentiment for the first time since June, according to a global survey by Bank of America. Fund managers see a 79% chance of a soft landing as rate cuts support the economy. However, investors are “nervous bulls,” with risk appetite tumbling to an 11-month low, according to BofA strategist Michael Hartnett.
European stocks climb to their highest in two-weeks with all 20 sectors in the green. The Stoxx 600 was up 0.7%, led by retail and banking stocks while healthcare and telecommunications stocks lagged. Gains were also boosted by the latest German ZEW Investor Confidence print which was weaker than expected, boosting hopes for even more rate cuts by the ECB.
In the FX market, the Bloomberg Dollar Spot Index drops for a fifth consecutive session, falling 0.1% to the lowest since January ahead of Wednesday’s Federal Reserve policy decision. The yen erased an earlier loss against the dollar as a slide in Japanese shares boosted demand for the currency as a haven.
In rates, treasuries inch higher, with US 10-year yields falling 1 bp to 3.61%. Treasuries are narrowly mixed in early US trading with the curve flatter as front-end yields rise about 1bp on the day with 7Y-30Y sectors little changed.
In commodities, oil prices are little changed, with WTI trading near $70.10 a barrel. Spot gold falls $7 to around $2,576/oz. Bitcoin rises 2%.
Looking to the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for August, Canada’s CPI for August, and the German ZEW survey for September. From central banks, the FOMC will begin their two-day meeting today.
## Bottom Line
The market is eagerly anticipating the outcome of the upcoming FOMC meeting, with a 70% chance of a 50bps rate cut being priced in. This has led to a surge in global markets, with US equity futures and European stocks trading higher. However, the question remains whether the Fed will ease by 25 basis points or double that amount. This uncertainty has boosted investor sentiment, but has also led to a drop in risk appetite. The outcome of the FOMC meeting could have significant implications for the global economy and market dynamics. What are your thoughts on this? Share this article with your friends and let us know your opinions. Don't forget to sign up for the Daily Briefing which is everyday at 6pm.
US equity futures are trading just below all-time highs, led by the tech sector, as global markets trade higher ahead of the Federal Open Market Committee (FOMC) meeting. As of 8:00am ET, S&P futures are up 0.4%, rising for a seventh consecutive day. European stocks are also broadly higher, while Asian markets are mixed and Japan stocks tumbled 2% after reopening from holiday and being dragged lower by the surging yen. The USD remains under pressure, dropping for a fifth consecutive session, falling 0.1% to the lowest since January.
In premarket trading, Microsoft gains +2% after it raised its quarterly dividend 10% and announced a new $60 billion stock repurchase program. Intel is up +6.5% after it announced it will make custom AI chips for Amazon AWS. Other notable premarket movers include AppLovin, HP Enterprise, Shopify, SolarEdge Technologies, Torrid Holdings, and Viasat.
On the eve of the Fed’s first rate cut in more than four years, investor attention will home in on US retail figures due later. The numbers will feed into a debate raging across markets over whether the Fed will ease by 25 basis points, or by double that amount.
Meanwhile, optimism around Fed rate cuts has boosted investor sentiment for the first time since June, according to a global survey by Bank of America. Fund managers see a 79% chance of a soft landing as rate cuts support the economy. However, investors are “nervous bulls,” with risk appetite tumbling to an 11-month low, according to BofA strategist Michael Hartnett.
European stocks climb to their highest in two-weeks with all 20 sectors in the green. The Stoxx 600 was up 0.7%, led by retail and banking stocks while healthcare and telecommunications stocks lagged. Gains were also boosted by the latest German ZEW Investor Confidence print which was weaker than expected, boosting hopes for even more rate cuts by the ECB.
In the FX market, the Bloomberg Dollar Spot Index drops for a fifth consecutive session, falling 0.1% to the lowest since January ahead of Wednesday’s Federal Reserve policy decision. The yen erased an earlier loss against the dollar as a slide in Japanese shares boosted demand for the currency as a haven.
In rates, treasuries inch higher, with US 10-year yields falling 1 bp to 3.61%. Treasuries are narrowly mixed in early US trading with the curve flatter as front-end yields rise about 1bp on the day with 7Y-30Y sectors little changed.
In commodities, oil prices are little changed, with WTI trading near $70.10 a barrel. Spot gold falls $7 to around $2,576/oz. Bitcoin rises 2%.
Looking to the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for August, Canada’s CPI for August, and the German ZEW survey for September. From central banks, the FOMC will begin their two-day meeting today.
## Bottom Line
The market is eagerly anticipating the outcome of the upcoming FOMC meeting, with a 70% chance of a 50bps rate cut being priced in. This has led to a surge in global markets, with US equity futures and European stocks trading higher. However, the question remains whether the Fed will ease by 25 basis points or double that amount. This uncertainty has boosted investor sentiment, but has also led to a drop in risk appetite. The outcome of the FOMC meeting could have significant implications for the global economy and market dynamics. What are your thoughts on this? Share this article with your friends and let us know your opinions. Don't forget to sign up for the Daily Briefing which is everyday at 6pm.
