Dipping 30 to 40 points after the bell the Dow Jones displayed only the slightest pre-Fed nerves this Wednesday, as is to be expected given how well-signalled December’s (admittedly still only potential) rate hike has been. The dollar, interestingly, was just as weak as the Dow, dropping 0.3% against the pound (allowing sterling to near $1.27) and 0.2% against the euro.
It will be interesting to see how much the market reacts to this evening’s statement from Janet Yellen and co. At this point a rate hike is so expected that investors may be more focused on what kind of signs the Fed throws out in regards to its path in 2017 than on the immediate outcome of today’s meeting. If the central bank doesn’t increase rates, on the other hand, then the markets may well be in a state of shock tomorrow, though it could provide the Dow Jones with the final boost it needs to cross 20000.
Elsewhere the European indices continued their losses this afternoon; the FTSE and DAX fell 0.4% apiece, while the CAC saw a larger 0.7% decline. For the UK index the main drag was its commodity stocks, with Brent Crude giving back some more of the growth it managed on Monday, a situation not helped by a smattering of red in its banking sector.