(Sept 14): U.S. equity futures pointed higher Monday as investors looked ahead to a Federal Reserve meeting that could provide clues on the policy outlook. Asian stocks looked set for a muted start.
Futures were little changed in Japan and Australia, while S&P 500 contracts were up about 0.5%. Global stocks are coming off the back of the first consecutive weeks of declines since March. Currency markets saw muted moves as trading began Monday. Gold was steady and crude oil slipped.
With the Fed expected this week to maintain its dovish stance on policy, investors will continue to look out for signs the global economy is recovering from the pandemic. Traders remain on edge as a recent reassessment of valuations and volatility in options markets has raised question marks over the sustainability of the technology-led rally.
“With no clear assured path to economic recovery and release from the grips of coronavirus and with the added geopolitical risks of the fast-approaching U.S. presidential election and then the Brexit deadline at year-end, we expect broad market sentiment to remain fragile for the foreseeable future,” said Simon Ballard, chief economist at First Abu Dhabi Bank.
On the virus front, the U.S. will “likely” deploy a vaccine to the public by year-end, Pfizer Inc. Chief Executive Officer Albert Bourla said. That’s a shorter time frame than most public health officials have suggested. Earlier, AstraZeneca Plc and the University of Oxford restarted a U.K. trial of their vaccine after the study was halted over concerns about a participant who fell ill.
Meantime, Japan’s ruling party chooses its new leader Monday. Yoshihide Suga is the favorite to replace Prime Minister Shinzo Abe.
Here are some key events coming up:
- China industrial production and retail sales data is due on Tuesday.
- Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
- Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday.
- Friday sees quadruple witching for U.S. markets when the quarterly expiration of futures and options on indexes and stocks happens on the same day.
These are the main moves in markets:
- S&P 500 futures rose 0.5% as of 7:03 a.m. in Tokyo. The index ended Friday little changed.
- Futures on Japan’s Nikkei 225 were little changed on Friday.
- Hang Seng Index futures slipped 0.5% on Friday.
- Futures on Australia’s S&P/ASX 200 Index were little changed.
- The yen was steady at 106.13 per dollar.
- The offshore yuan was at 6.8341 per dollar.
- The euro bought US$1.1842, little changed.
- The yield on 10-year Treasuries ended last week at 0.67%.
- West Texas Intermediate crude slipped 0.5% to US$37.11 a barrel.
- Gold was at US$1,939.55 an ounce, little changed.