The US Federal Reserve prepares the sixth consecutive increase of interest rates to try to curb inflation. According to experts, the rise will again be 0.75%. If the forecasts are fulfilled, the official interest rate of the largest economy in the world will be between 3.75% and 4%.
The US dollar fell on Wednesday from a one-week high against major currencies, with traders on tenterhooks ahead of imminent Fed decision on interest rates, which should also give clues about the future path of monetary policy.
The yen had a sudden boost mid-morning Japanese time, with traders on alert for possible intervention around the Fed meeting.
Risk-sensitive Australian and New Zealand dollars also rose strongly, buoyed by a rally in Chinese stock markets.
The dollar index – which measures the greenback against a basket of six currencies that includes the yen, euro and sterling – fell 0.14% to 111.32, but was not far below the high of the Tuesday at 111.78, the strongest level since October 25.
In the Old Continent, the European Central Bank should start to reduce its public debt purchase program early next year, Bundesbank President Joachim Nagel told a German newspaper, outlining an ambitious timetable to reduce a balance sheet of €8.8 trillion.
With inflation in double digits, the ECB has raised rates at the fastest pace in history and last week said talks could start in December to scale back the 3.3 trillion euro asset purchase program.
But most policymakers have been cautious about a timetable, and Nagel is the first to publicly advocate starting in early 2023. “We should start reducing our bond portfolio early next year, for example, by allowing existing bonds to expire in a market-friendly way,” Nagel told the Frankfurter Allgemeine Zeitung in an interview.
Asia rises on the possible relaxation of Covid measures in China. MSCI’s index of Asia-Pacific shares, which does not include Japan, was up 0.8% after tumbling earlier in the day, with Chinese stocks and Hong Kong stocks reversing losses on hopes China will soften. its harsh zero COVID restrictions.
An unverified note circulating on social media on Tuesday that China was planning a reopening of strict COVID-related restrictions in March triggered a sharp rebound after drastic sales last month. But lockdowns and business disruptions in China are on the rise again, and some analysts don’t expect major changes to its regulations until well into next year or even 2024.
On the macroeconomic side, German exports fall 0.5% in September, below expectations. The market consensus had forecast a rise of 0.1%. The data has fallen compared to 2.9% the previous month. As for imports, they have fallen to -2.3%, compared to the -0.4% expected and increases of 4.9% in the previous month. The trade balance showed a surplus of 3.7 billion euros, after a figure of 1.2 billion euros in August. In the market, the forecast was for a surplus of 0.7 billion euros.
“The Ibex 35 (+0.53%) closed yesterday at the edge of 8,000 points, a level that could be exceeded at the opening today, Wednesday, as the Spanish index is coming in the futures market. Now, in the absence of What may happen after the Fed’s decision today, the Spanish stock market flirts with a level of relevance, since in previous weeks, this level has been a fight between bidders and demanders Within the selective Spanish, Pharma Mar (+3.07 %) wants to continue with the rebound that it brings from the lows of October, accumulating more than 15% in several sessions. So much so that the shares are approaching the highs of last August (63.80 euros), so that we will see if it is able to pierce said resistance”, point out the IG experts.