MILANO – The big day of the Fed has arrived: traders are waiting for Jerome Powell’s move that will raise rates by another 75 basis points, for the third meeting in a row, although the possibility of a maxi-hike is not entirely excluded 100 basis points to further strengthen the fight against inflation which has started to slow down slightly but is proving to be resilient and pervasive in the economy. The riskiest assets are suffering, the trend is also widespread because even the ECB, through the mouth of President Christine Lagarde, has reconfirmed its tightening policy saying that the costs of money will rise again in the months to come, even if the Squeezes: “We will decide meeting by meeting: the outlook on inflation will determine” when and where the hikes stop, Lagarde said.
Trading looks weak in Europe after a difficult session in Asia.
Weak futures on Europe
Weak and mixed futures in Europe awaiting the Fed. Today at the end of two days of monetary policy, the US central bank is expected to announce a new maxi rate hike. Markets have priced a squeeze of at least 75 basis points, with an 18% chance of a full percentage point, as the Federal Reserve is expected to tighten its hawkish approach to tackling inflation. Eyes also focused on the intervention of the Russian president, Vladimir Putin, expected in the morning. Futures on the Eurostoxx 50 mark + 0.09%, those on the Dax mark -0.12% and those on the Ftse 100 register -0.05%.
Dollar strengthens ahead of Fed tightening
The euro opens slightly below par with the dollar. The greenback is trading close to two-decade highs against a basket of currencies after US Treasury yields jumped ahead of another aggressive Federal Reserve rate hike. Two-year U.S. Treasury yields, a rough gauge of interest rate expectations, reached 3.992% overnight, the highest since 2007, while benchmark 10-year Treasury yields rose to 3.604%, the highest since 2011. The single currency changes hands at $ 0.9963 and at 143.47 yen. EDollar / yen at 143.97.
Strong falls in Asia
Asian stock exchanges travel sharply, in line with the Wall Street closing, ahead of the outcome of the Federal Reserve and Bank of Japan meetings.
Today at the end of two days of monetary policy, the US central bank is expected to announce a new maxi rate hike. Markets have priced a squeeze of at least 75 basis points, with an 18% chance of a full percentage point, as the US central bank is expected to tighten its hawkish approach to tackling inflation.
And tomorrow the Bank of Japan should confirm the current ultra-accommodative approach, even if since July the institute has no longer talked about “temporary” high inflation, a possible sign of changes in Japanese monetary policy sooner than expected. The Nikkei Index hit a two-week low of 27,297.5 points at the start of the session and is now down 1.22% to 27,349.50 points. The broader Topix fell 1.28%, hitting its lowest level since September 7.
The Chinese markets have slipped to the lows of more than four months with Shanghai leaving 0.34% on the ground and Hong Kong falling by 1.55%. Seoul loses 0.90%.