Morning Briefing: Equities under pressure ahead of Fed

Morning Briefing: Equities under pressure ahead of Fed

Morning Briefing: Equities under pressure ahead of Fed Equities under pressure ahead of Fed

The Federal Reserve will begin its two-day meeting Tuesday and there is high expectation of an interest rate rise and it comes at a time of great uncertainty for the markets.

Politics is in focus with UK lawmakers finally giving the government permission to begin their EU exit process; Dutch elections take place Wednesday with French presidential elections in the near future.
There is also growing tension between some EU nations and Turkey.

Commodities remain constrained while data continues to paint a mixed picture for major economies.
Asian indexes closed broadly flat Tuesday with Chinese retail data disappointing and an Australian business confidence index slipping. Seoul was the session’s best performer.

In Europe, political concern is making investors cautious and most indexes are flat or lower. Mixed Eurozone and German data has exacerbated the issues. The exception is London, which is gaining on parliament’s Brexit vote.

Wall Street and Toronto are expected to open lower. Canadian home price data is due. The Fed’s FOMC meeting begins.
 

 

Latest

1 month ago

1 year ago

 

North America (previous session)

US Dow Jones

20,881.48 (-0.10 per cent)

+1.84 per cent

+21.20 per cent

TSX Composite

15,544.82 (+0.25 per cent)

-1.53 per cent

+15.34 per cent

 

Europe (at 5.00am ET)

UK FTSE

7,378.61 (+0.16 per cent)

+1.51 per cent

+19.50 per cent

German DAX

11,987.16 (-0.01 per cent)

+1.85 per cent

+20.01 per cent

 

Asia (at close)

China CSI 300

3,456.69 (-0.04 per cent)

+0.61 per cent

+12.75 per cent

Japan Nikkei

19,609.50 (+0.12 per cent)

+1.93 per cent

+13.79 per cent

 

Other Data (at 5.00am ET)

Oil (Brent)

Oil (WTI)

Gold

Can. Dollar

51.56

(+0.41 per cent)

48.54

(+0.29 per cent)

1202.70

(-0.03 per cent)

U$0.7428

 

Aus. Dollar

U$0.7554



The pace not the rate may be the surprise from the Fed

While most analysts are calling for an interest rate rise from the Fed this week, the surprise from the FOMC meeting could be a renewed pace of increases.

While there was the potential for three rate rises this year, there could now be more as the central bank seeks stronger inflation. 

"They do not have as much room to be patient as they did before," Tim Duy, an economics professor at the University of Oregon told Reuters.

With inflation rising in some economies in Europe and Asia, the policymakers will be keen to ensure that the US does not lag, which may require additional increases for interest rates.