The weekahead; Fed meeting could trigger stock sector rotation

The weekahead; Fed meeting could trigger stock sector rotation

The weekahead; Fed meeting could trigger stock sector rotation

In Asia Pacific equities, futures implied a higher open for Japanese equities as markets re-opened for trade after a public holiday.

USA stock index futures were slightly higher on Tuesday, ahead of the Federal Reserve's two-day policy meeting, which would give investors clues on the timing of the next US interest rate hike. Rate changes aren't expected in either case, though the Fed is expected to detail plans on how it.

The pan-European FTSEurofirst 300 index was up 0.3 per cent. MSCI's index of world stocks was last up 0.2 per cent and hit an intraday record high of 487.07.

The weekahead; Fed meeting could trigger stock sector rotation

"The anticipated announcement of the start of balance sheet normalisation and the likelihood of the Fed keeping the option of a December rate hike alive has been the catalyst for last night's Dollars move", traders at HiFX said in a note.

While the Fed's QE program was a pillar of the USA stock market's march from then-12-year lows on the S&P 500 on 9 March 2009 to the current record-high levels, winding it down is not expected to produce a major market reaction to the Southside. It's their job to shift policy levers, nudging interest rates higher and lower, to boost jobs and keep prices, or inflation, at the optimal level.

The dollar crept higher ahead of the event, with the greenback touching a seven-week high against the yen earlier in the session.

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The US military staged bombing drills with South Korea over the Korean peninsula, and Russian Federation and China began naval exercises ahead of the United Nations meeting where North Korea's nuclear threat is likely to loom large. Fed Chair Janet Yellen will hold a press conference after the FOMC meeting ends.

A possible new rate hike would make home-buying more expensive and increase monthly payments for credit cards.

Shares in Pavillon Holdings, an operator of seafood restaurants chain, rose 2 percent after saying its unit acquired commercial properties in Malaysia for 52 million Malaysian ringgit (S$16.7 million).

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On Wall Street on Monday, the Dow Jones Industrial Average closed at a record high for the fifth straight session, and the S&P 500 marked its second straight closing record high, as higher U.S. Treasury yields helped lift financial shares. The Nasdaq Composite Index was up 6.17 points, or 0.10 percent, to 6,454.64.

"Overall risk-on sentiment and the dollar strength seem to be driving gold lower".

Cable dropped 0.4 percent to $1.3537 as of 10:39 a.m. London.

United States stocks close higher ahead of Fed meeting
The broadest measure of regional shares, the MSCI Asia ex-Japan index, was marked 0.1% higher by the end of the session. USA crude futures CLc1 rose 2 cents to settle at $49.91, while Brent crude futures LCOc1 fell 14 cents to $55.48.

In commodities, the November crude contract gave back nine cents at US$50.35 per barrel while the December gold contract fell $14.40 to US$1,310.80 an ounce.

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