(Bloomberg) -- Asian stocks look set for a muted start to trading Wednesday as investors await a Federal Reserve meeting to gauge the extent of central bank support for the economic recovery. Crude oil jumped, while U.S. shares closed higher.
Futures pointed to modest gains in Australia and Hong Kong, and were little changed in Japan, where Yoshihide Suga is set to be the country’s new prime minister later today. The S&P 500 rose for a third consecutive session, as gains in technology shares helped offset a late slide in financials. Treasuries and the dollar were little changed. Oil rose to its highest in more than a week after economic data from China to the U.S. fueled optimism that factories are getting back to work.
Investors are looking for catalysts to take markets higher after the impressive recovery in global stocks from March lows sputtered in the first half of September. The Federal Reserve is expected to maintain its dovish stance at its policy meeting Wednesday after earlier saying it will shift to a more relaxed approach on inflation. Central bank stimulus has been shoring up sentiment in the face of risks from the pandemic, the U.S. presidential election and the possibility of a no-deal Brexit.
“Given the volatility we have seen in the stock market in the last couple of weeks – as more evidence of some bubble-like characteristics in the exposure to growth stocks has been revealed – it’s hard to see a new, strong rally ahead of the U.S. election,” said Chris Iggo, chief investment officer of core investments at AXA Investment Managers.
Trade issues also continue to simmer. The World Trade Organization ruled that the U.S. violated international regulations by imposing tariffs on more than $234 billion of Chinese exports.
Here are some key events coming up:
- Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
- Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday.
- Friday sees quadruple witching -- the quarterly expiration of futures and options on indexes and stocks -- in U.S. markets
These are the main moves in markets:
- The S&P 500 Index increased 0.5%.
- Nikkei 225 futures were little changed.
- Australia’s S&P/ASX 200 Index futures rose 0.8%.
- Hong Kong’s Hang Seng Index futures rose 0.3%.
- The yen traded at 105.41 per dollar.
- The offshore yuan was at 6.7789 per dollar.
- The Bloomberg Dollar Spot Index was flat.
- The euro was at $1.1849.
- The yield on 10-year Treasuries increased one basis point to 0.68%.
- West Texas Intermediate crude rose 3% to $38.39 a barrel.
- Gold was at $1,954.16 an ounce.
©2020 Bloomberg L.P.