Markets in cautious mood ahead of Fed rate decision - 20.9.2023

The Dollar strengthening is intact currently . The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.1% on Tuesday.

EUR/USD reversed its climbing yesterday while GBP/USD continued its advancing as final euro zone inflation for August was revised down from 5.3% year over year to 5.2%. Euro is higher against the dollar currently while Pound is lower. USD/JPY joined AUD/USD’s accelerated advancing on Tuesday with the yen lower against the Greenback currently and Australian dollar higher still.

Futures on three main US stock indexes are lower currently as the yield on benchmark 10-year US notes has edged down to 4.363% currently. Stock indexes ended lower on Tuesday with three main stock benchmarks recording daily losses in the range from -0.2% to -0.3% as new US home construction dropped in August to the lowest level since June 2020. Investors are awaiting Fed’s rate decision today with interest rate futures pricing implying almost no chance of a hike.

European stock indexes are mixed currently after a mixed session on Tuesday with retail stocks leading losses. Asian indexes futures are mostly down today with Hong Kong’s Hang Seng index leading losses while People’s Bank of China left lending rates on hold.

Brent is down nearly $1 currently. Oil prices declined on Tuesday after rising to 10-month high amid reports Russia's government is considering imposing export duties on all types of oil products of $250 per metric ton - much higher than current fees - from October 1 until June 2024 to tackle fuel shortages. The Energy Information Administration will release its US inventory data at 16:30 CET today. The US oil benchmark West Texas Intermediate (WTI) slid 0.3% and is lower today. Brent slipped 0.1% to $94.34 a barrel.