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Investors look towards this evening’s US rate decision


The FTSE is up 0.2% this morning in early trading but with UK retail sales data due this morning and this afternoon’s Federal Reserve statement, investors are holding back.

Spreadex analyst, Connor Campbell commented “Investors were really sitting on their hands this morning, unwilling to act until they’d got a glimpse of the UK retail sales reading and, more importantly, this evening’s Fed statement.”

“Despite myriad different macro-events fighting for attention – including a deadly earthquake in Mexico, the latest hurricane devastation in the Caribbean, Donald Trump’s sabre-rattling speech at the UN and Boris Johnson’s Brexit boasting – the markets are only interested in one thing this Wednesday: September’s Federal Reserve meeting.”

The focus will undoubtedly be on the US Dollar today in light of the Federal Reserve Rate Decision and Janet Yellen’s press conference this evening. ADS Securities analyst, Konstantinos Anthis commented “Investors know that the Fed will not raise interest rates this time around so their attention will be focused on any announcements regarding a balance sheet normalization process and the future path of monetary policy.”

“The US central bank is widely expected to announce that they will stop reinvesting their profits from their bond buying program and thus reduce stimulus from the domestic economy; however, given that this has long been telegraphed it might not be enough to raise the dollar. Market participants will be wanting more from Janet Yellen if they are going to start buying dollars.”

Staying with the US, the three major bourses closed at record highs ahead of today’s Federal Reserve meeting. They did, however, close off their intraday highs as they digested Trump’s speech to the UN general assembly. Accendo Markets analyst, Mike van Dulken noted “The Dow Jones outperformed thanks to gains for Goldman Sachs and Verizon, while Financial and Telecoms names led the charge on the S&P 500 amid reports of consolidation in the latter sector.”

“The Tech-focused Nasdaq also closed at a record high.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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