Stocks fall, dollar eases broadly as investors await Fed

  • US stocks fell in early trade.
  • The dollar eased across the board.
  • All eyes on the Fed; A hike of 75 bps is expected.

New York, Nov 2 (Reuters) – The dollar edged lower against other major currencies on Wednesday as global stock indexes fell and expectations of another interest rate hike by the U.S. Federal Reserve later in the day.

US Treasury yields were little changed.

The US Federal Reserve is expected to announce a three-quarters of a percentage point increase as part of its efforts to curb inflation. A policy statement from the Federal Open Market Committee (FOMC) is due at 2pm EDT (1800 GMT).

The Fed raised overnight interest rates from near zero to a benchmark of 3.00% to 3.25% in March.

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The main question for some market participants is whether the Fed will signal that it could slow further rate hikes in the so-called dovish pivot.

Uncertainty about how economic data will unfold means a dovish pivot is still possible, analysts said.

Data on Tuesday showed U.S. personal payrolls rose more than expected in October. It also supported the case for the Fed to stay tight, following Tuesday’s report showing a jump in US monthly job openings.

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“The usual calm before the FOMC storm is what we’re seeing this morning across all asset classes,” said Michael Brown, head of market intelligence at payments firm Caxton in London.

In currencies, The euro was 0.11% higher against the dollar, while the greenback was down 0.8% against the Japanese yen at 147.03 yen. ,

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A Reuters poll found that currency strategists thought the dollar’s pullback was temporary.

The Dow Jones Industrial Average (.DJI) fell 93.27 points, or 0.29%, to 32,559.93; The S&P 500 (.SPX) fell 17.14 points, or 0.44%, to 3,838.96, while the Nasdaq Composite (.IXIC) shed 7 points, or 0.65%, to 10,819.79.

The pan-European STOXX 600 index (.STOXX) lost 0.10%, while MSCI’s gauge of stocks around the world (.MIWD00000PUS) fell 0.21%.

Treasury yields were little changed in the hours before the Fed news release.

The two-year yield, which typically moves in line with interest rate expectations, is above 4.5% and the yield on the benchmark 10-year note is above 4%.

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US crude was recently up 0.44% at $88.76 a barrel and Brent was at $95.03, up 0.4% on the day.

In the beginning, Upbeat comments from the Chinese regulator on rising policy support and expectations among investors for an easing of strict COVID-19 measures lifted sentiment in its markets.

Bank of Japan Governor Haruhiko Kuroda has said that adjusting the central bank’s yield curve control policy may be a future option.

Additional reporting by Saqib Iqbal Ahmed in New York and Dhara Ranasinghe in London. Kim Coghill, Edited by Mark Potter and Alex Richardson.

Our Standards: Thomson Reuters Trust Principles.

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