Investing.com - Here are the top five things you need to know in financial markets on Wednesday, September 26:
1. Fed Expected to Increase Interest Rates
The Federal Reserve is expected to increase interest rates when it concludes its two-day policy meeting in Washington later Wednesday.
The U.S. central bank is widely expected to raise interest rates by a quarter of a percentage point to 2.25%, in what would be its third rate hike of the year.
With a rate hike all but locked in, the Fed’s statement released at 2:00 PM ET (18:00 GMT) will be the main focus of the day. Fed Chairman Jerome Powell will give his press conference at 2:30 PM ET.
The so-called dot-plot graph, which shows expectations by Fed members of futures rate hikes, could also be market moving, as investors look for clues of an increase in December. The chance of a fourth rate hike in December is priced in at 77.7%, down from the previous week’s chance of 84.2%.
2. Stocks Rebound as all Eyes Turn to Fed Decision
U.S. futures pointed to a higher opening on Wall Street as investors wait for the Fed decision.
The S&P 500 futures rose 0.21% while Dow futures gained 0.17% and the tech heavy Nasdaq 100 futures increased 0.37%.
Apple (NASDAQ:AAPL) stock is likely to be in focus, after semiconductor Qualcomm (NASDAQ:QCOM) accused the tech giant of stealing chip secrets and giving them to Intel (NASDAQ:INTC).
Meanwhile trading in Europe was mostly down, with Germany’s DAX and London’s FTSE 100 in the red, while France’s CAC 40 rose slightly.
Asian stocks ended the day higher as trade tensions eased. The Shanghai Composite up 0.92% and the SZSE Component index rose 0.80%. The China A50 Index of China’s biggest companies surged 1.33%, while in Japan, the TOPIX inched down 0.04% and the Nikkei 225 increased 0.36%.
3. Dollar Steady as Investors await Fed
The U.S. dollar was holding steady against a currency basket as investors awaited the conclusion of the Fed meeting, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, little changed at 93.75 by 05:26 AM ET (09:26 AM GMT) in rangebound trade.
Attention will be turning to the Fed’s plans for the direction of monetary policy in 2019. Indications that the Fed is looking to remain hawkish next year would likely bolster the dollar, while suggestions that it may slow the pace of rate hikes or that it is coming to the end of its tightening cycle next year could send the greenback lower.
4. Brent Retreats from near 4-Year Highs; U.S. Inventory Data Ahead
Brent prices retreated from the four year highs hit in the previous session. London traded Brent crude futures were down 0.33% to $80.99 a barrel, after hitting $82.55 on Tuesday, the highest price since November 2014. U.S. crude prices were down 0.3% to $72.06, pulling back from Tuesday’s highs of $72.75, the most since July 11.
The impending loss of supply from Iran has seen oil prices rally, with the Organization of the Petroleum Exporting Countries and non-OPEC members, including Russia, seemingly reluctant to boost output in order to offset falling global supply.
On Tuesday, U.S. President Donald Trump blasted OPEC, saying its members were “as usual ripping off the rest of the world”.
Speaking at the United Nations General Assembly Trump said the U.S. was “not going to put up with . . . these horrible prices much longer”.
The U.S. Energy Information Administration (EIA) will release its official weekly oil supplies report for the week ended Sept. 21 at 10:30AM ET, amid forecasts for an oil-stock drop of 1.27 million barrels.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories unexpectedly rose by 2.9 million barrels last week, against analyst expectations for a decrease of 1.3 million barrels.
5. New Home Sales Data Released
Housing numbers will be closely watched, as investors wait for the interest rate decision from the Fed and look for signs of continued economic strength.
New home sales data comes out at 9:00 AM ET (13:00 GMT), with analysts expected a rise of 630,000 in August compared to 627,000 in July.
On Tuesday the home price index for July came in as expected at 0.2%.