European and Asian stocks struggled to find direction on Wednesday as attention turns to the US Federal Reserve’s policy decision later in the day, when the central bank is expected to trim rates.

European equities edged upwards in early trade, with the composite Stoxx 600 index adding 0.1 per cent, with Frankfurt’s Dax 30 cent and Paris’s Cac 40 up 0.2 per cent. London’s FTSE 100 gained 0.4 per cent.

Stock markets in Asia-Pacific were mixed earlier in the day with Japan’s Topix down 0.5 per cent as the energy segment fell back, while in Australia the S&P/ASX 200 dipped 0.2 per cent. The Hang Seng in Hong Kong was down 0.1 per cent and the CSI 300 of Shanghai- and Shenzhen-listed companies rose 0.5 per cent. 

All eyes now turn to the Fed which is expected to lower its benchmark interest rate by 25 basis points at the conclusion of its meeting on Wednesday.

In currencies, meanwhile, the pound dipped 0.5 per cent to $1.2448 after inflation slowed to its lowest level since late 2016 and EU officials warned the chances of the UK striking a Brexit deal were increasingly doubtful.

The yield on the UK 10-year gilt was down 4.3 basis points at 0.648 per cent following the inflation data. The German 10-year Bund yield was flat at minus 0.499 per cent, while that on US 10-year Treasuries slipped 3.4 basis points to 1.785 per cent.

Oil fluctuated, meanwhile, having dropped 5 per cent on Tuesday as Saudi officials sought to calm the market after an attack on the kingdom’s infrastructure had sent prices skyrocketing the previous day.

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Saudi Arabia’s energy minister said the kingdom had restored half of the lost production and would fully restore output by the end of September. He added that full production capacity of 12m b/d would not be available until the end of November.

International benchmark Brent crude was down 0.5 per cent at $64.22 a barrel, by mid-morning in London on Wednesday, while West Texas Intermediate, the US marker, fell by the same percentage to $59.02.

On Wall Street overnight, the S&P 500 finished 0.3 per cent higher as investors considered the ramifications of the resumption of oil supply. Futures trade pointed to the market slipping 0.1 per cent at the open on Wednesday.

Coming up

  • UK consumer price index
  • Eurozone consumer prices

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.



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