Global market news: Markets ‘dovish’ as all eyes turn toward Fed meeting
Asian share markets were flat on Wednesday as traders await the US Federal Reserve meeting, that will decide whether to raise interest rates.
As a result, all eyes were on the Fed reserve meeting, and oil prices fell as a supply glut caused Brent and US crude prices to drag to significant lows.
This comes after US President Donald Trump voiced his concerns of a rate hike decision. He warned the central bank on Tuesday to not “make yet another mistake”
IG Market Analyst, Kyle Rodda says traders are treading carefully, anticipating the Fed decision.
“Traders obviously can’t take much of it any more. Risk is off the table and bets are being placed that we are in for a “dovish hike”. That is: a hike tomorrow, but a very careful downgrade in the projections for future hikes.” Mr Rodda said.
Mr Rodda says markets are going deep on the notion that a dovish Fed is upon us.
“The possibility is that the markets have set the bar too low.” Mr Rodda said.
Oil price
Oil - Brent Crude fell 6% overnight, while Oil - US Crude was down another 13 cents on Wednesday at $46.11 a barrel.
Bonds
10-year Treasury yields fell to their lowest since August at 2.799 % on Wednesday
Yields on two-year US notes touched a three-month trough of 2.629 %, with Yields in Japan and Australia also reaching multi-month lows.
“Junk bonds suffered the most, with the spread on high yield credit widening to multi-year highs. The dynamic was fuelled by another tumble in oil prices on fears of a slow-down in economic activity will cause a supply glut.” Said Mr Rodda.
The USD pulled its index back to 97.000, from a recent 97.711 top.
It fell to 112.46 JPY yen, from a 113.70 high, while the euro bumped up to $1.1374 from a $1.1266 low.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
See an opportunity to trade?
Go long or short on more than 17,000* markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
