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It’s Fed day, North Korea says Trump agreed to lift sanctions and more weak European data. Here are some of the things people in markets are talking about today.

Decision day

The Federal Open Market Committee is almost certain to announce a quarter-point raise in interest rates when it publishes its decision at 2:00 p.m. Eastern Time today. If that happens, investor focus will turn to the dot-plot, which may show a median estimate of four hikes this year, up from three previously. The announcement will be followed at 2:30 p.m. by Chair Jerome Powell’s second press conference since he took the helm at the world’s most important central bank. 

Dust settling

North Korean state media reported that leader Kim Jong Un said that President Donald Trump offered to lift sanctions against the country when the two met in Singapore. As the dust settles following yesterday’s summit, skepticism is building over what was achieved as the next agreed steps in the denuclearization drive remain unclear. As Trump arrives back in the U.S. this morning, attention will return to domestic issues as he faces increasing pressure to sit down for an interview with Special Counsel Robert Mueller.

European data

Euro-area industrial production fell more than expected in April, dropping 0.9 percent, with underwhelming economic data becoming the norm in the common-currency area ahead of tomorrow’s European Central Bank decision. The meeting, after which the ECB may or may not announce an end date for QE, will also be accompanied by its latest projections for the region’s economy. A Bloomberg survey showed that political and trade worries remain the biggest concerns for economists. 

Markets waiting

Overnight, the MSCI Asia Pacific Index fell 0.4 percent while Japan’s Topix index closed 0.4 percent higher as the yen weakened ahead of the Fed decision. In Europe, the Stoxx 600 Index was 0.2 percent higher at 5:40 a.m. with stocks mostly range-bound as investors awaited monetary updates.  S&P 500 futures pointed to a quiet open, the 10-year Treasury yield was at 2.957 percent and gold was lower. 

Oil update

The International Energy Agency said that OPEC members Iran and Venezuela could lose almost 30 percent of their oil output next year due to U.S. sanctions and economic upheaval, in its first detailed forecast for 2019. The report this morning will increase pressure on a meeting of OPEC and its allies next week to permit increases in output. The recent rally in crude prices helped by production cuts saw the end of the oil market’s contango structure. That shift has hit trading houses hard, with Trafigura Group reporting a 53 percent drop in first-half profits. 

What we've been reading

This is what's caught our eye over the last 24 hours.

  • Bitcoin’s collapse accelerates, falls to lowest since February.
  • Merkel calls out Trump, citing services surplus with Europe.
  • Turkey’s election is too close to call, Bloomberg survey shows.
  • Japan’s $1.5 trillion pension plan says eat what you kill.
  • Brexit is turning into the road trip from hell. 
  • What’s in a name?
  • The hustlers fueling cryptocurrency’s marketing machine. 

To contact the author of this story: Lorcan Roche Kelly in Dublin at lrochekelly@bloomberg.net

To contact the editor responsible for this story: Sid Verma at sverma100@bloomberg.net, Samuel Potter

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