While the Fed is expected to keep interest rates unchanged on Wednesday at the conclusion of its two-day deliberations, it could well hint that another rate hike is more than likely by the end of the year.
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In other energy trading, wholesale gasoline sank 6 cents, or 4 percent, to $1.36 a gallon. British pound declined sharply against the dollar on Tuesday as the pound was weighted down on worries about the political and economic risks from Britain’s pending exit from the European Union drove sterling to a five-week low ahead of US and Japanese central bank meetings.
Oil slipped back to $45.79 per barrel having briefly rallied on Monday on Venezuela’s bid to talk up a potential OPEC output freeze, though that soon fizzled on indications that USA crude stockpiles had risen again last week. It was up 0.3 percent but the oil and gas sector slipped 0.7 percent.
EMini futures for the S&P 500 ESc1 also edged up 0.2 percent, after major US indexes ended Monday’s choppy session almost flat.
(Recasts after start of European trading) * Major currencies little changed ahead of big events * Investors doubt BOJ can cheapen yen * BOJ’s next step seen as cutting rates and steepening yield curve By Jemima Kelly LONDON, Sept 20 (Reuters) – The yen edged up against the dollar on Tuesday, as traders doubted that the Bank of Japan will be able to meaningfully weaken the yen when it meets on Wednesday, and betted that the U.S. Federal Reserve will not raise interest rates. Broader markets ended marginally lower- BSE Midcap and the Smallcap index fell 0.1%-0.3%.
“Everybody is just waiting for the BOJ and the Fed – why do anything today?” said Commerzbank currency strategist Esther Reichelt in Frankfurt.
Hungary’s central bank was expected to stick to its unconventional easing policy following a surprise S&P upgrade to investment grade on Friday that has bolstered its high flying stock.BUX and bond markets and the forint EURHUF=D3.
Tuesday was the start of two-day meetings for the Fed and Bank of Japan.
Drug companies helped health care stocks make some modest gains, while Exxon Mobil fell on reports it’s being investigated by securities regulators.
U.S. Treasury yields fell as traders bought longer-dated bonds on uncertainty over the outcome of the BOJ meeting. It reached 130 basis points last Thursday, its widest level since June 27, according to Tradeweb. Brent crude, used to price global oils, slipped 35 cents to $45.60 a barrel in London.
USA oil prices rose slightly, lifted by hopes the planned restart of the country’s main gasoline pipeline after a leak more than a week ago will boost demand, while Brent slipped.
U.S. West Texas Intermediate (WTI) crude for October delivery closed up 14 cents at $43.44.
Gold gained 40 cents to $1,318.20 an ounce.
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Wall Street stocks finished slightly higher Tuesday ahead of a closely-watched policy announcement by the Federal Reserve.
