Dollar Holds Gain as Higher Yields Drive Caution Before Fed Meet

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The dollar held on to gains that boosted it from a two-week low, as traders remained cautious before Federal Reserve officials begin a two-day meeting that’s divided the market on prospects for higher interest rates.

A gauge of the greenback climbed the most in more than a week Tuesday as Treasuries tumbled, lifting the two-year note yield to the highest since April 2011, after data showed U.S. retail sales gained. Federal Open Market Committee members must weigh signs of robust growth with figures due Wednesday that are predicted to show consumer prices fell last month. The euro maintained back-to-back declines before a report forecast to indicate prices were flat in August.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, was at 1,205.20 as of 9:43 a.m. in Tokyo from 1,205.93 on Tuesday in New York, when it fell to 1,201.18, the least since Sept. 1. The dollar was little changed at $1.1277 per euro after a 0.6 percent, two-day advance. It fell 0.1 percent to 120.28 yen.

Source : Bloomberg

Oil Climbs as WTI-Brent Spread the Narrowest in Eight Months

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Oil rose as the difference between U.S. and global benchmark prices narrowed to the smallest in eight months amid rising North Sea deliveries and falling stockpiles at the largest U.S. storage hub.

The spread between West Texas Intermediate and Brent closed at $2.04, the least since January. A narrowing spread signals that the global supply glut is growing while there may be relative tightening in parts of the U.S. Stockpiles at Cushing, Oklahoma, the delivery point for WTI traded in New York, fell 1 million barrels last week in a Bloomberg forecast.

WTI for October delivery increased 59 cents, or 1.3 percent, to settle at $44.59 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 20 percent above the 100-day average at 4:44 p.m.

Futures extended gains after the American Petroleum Institute was said to report U.S. crude supplies slipped 3.13 million last week. The contract traded at $45.15 at 4:44 p.m.

Brent for October settlement, which expired Tuesday, rose 26 cents, or 0.6 percent, to $46.63 a barrel on the London-based ICE Futures Europe exchange.

Source: Bloomberg

Asian Stocks Follow U.S. Equities Higher as Consumer Shares Gain

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Asian stocks rose, following a rally in U.S. equities, as investors sifted through the latest data on the world’s biggest economy before the Federal Reserve’s decision on interest rates.

The MSCI Asia Pacific Index climbed 0.6 percent to 127.35 as of 9:01 a.m. in Tokyo, with consumer and material shares leading gains. The Standard & Poor’s 500 Index advanced 1.3 percent on Tuesday as a report showed retail sales climbed for a second straight month, a sign shoppers may be looking past recent volatility in financial markets. The Fed is about to decide whether the economy can withstand higher borrowing costs, with odds on a rate hike on Thursday holding at 28 percent. That’s down from more than 50 percent before China roiled global markets by devaluing the yuan.

Japan’s Topix index rose 1 percent. South Korea’s Kospi index increased 0.6 percent. Australia’s S&P/ASX 200 Index added 0.5 percent. New Zealand’s NZX 50 Index gained 0.3 percent. Markets in China and Hong Kong have yet to start trading.

The Shanghai Composite Index sank 3.5 percent on Tuesday, bringing its two-day loss to 6.1 percent, amid concern government measures to support the world’s second-largest equity market and economy are failing.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent on Wednesday.

Source: Bloomberg

Japanese Topix Advances First Time in Three Days Ahead of Fed

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Japanese stocks rose, following U.S. equities higher, as investors speculated that the Federal Reserve will refrain from raising U.S. interest rates this week.

The Topix index added 1.1 percent to 1,477.91 as of 9:01 a.m. in Tokyo, with all but two of its 33 industry groups gaining. It is headed for its first advance this week. The Nikkei 225 Stock Average increased 1.1 percent to 18,230.34. The Fed announces its interest rate review Thursday. The Bank of Japan publishes its September economic report on Wednesday, a day after it maintained its record monetary stimulus.

E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying equity measure rose 1.3 percent on Tuesday, closing at its highest level in more than two weeks.

Source : Bloomberg

U.S. Shares Advance Amid Economic Data Before Fed Rate Meeting

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U.S. shares rallied, with the Standard & Poor’s 500 Index closing at its highest level in more than two weeks, as retail sales data showed a resilient consumer before the Federal Reserve decides on Thursday whether to raise interest rates.

The S&P 500 gained 1.3 percent to 1,978.11 at 4 p.m. in New York, its highest since Aug. 28.

A report today showed retail sales climbed for a second straight month, a sign consumers may be looking past recent volatility in financial markets. Although confidence has taken a hit from stock-market turmoil and global-growth concerns, the data show households are still putting their savings from cheap energy to work.

Other data showed that while consumers are holding up, factories are struggling. U.S. factory production declined in August by the most since January 2014 as automakers scaled back after a surge the month before and a stronger dollar weighed on demand from overseas customers.

Meanwhile, a quarterly survey said chief executive officers of large U.S. companies are becoming less optimistic about the prospects for the world’s largest economy, with more leaders planning to cut capital spending and employment in the next six months. The Business Roundtable CEO Economic Outlook Index fell to the lowest level since 2012, according to results compiled by Bloomberg.

Source : Bloomberg