Traders and Investors await Fed and BOJ Policy Decisions on Wednesday

September 20, 2016 - 5:03pm

 by Gary Wagner

Equities are holding mildly higher as the Federal Open Market Committee’s meeting commences today. It is largely expected that the Fed will maintain rates as they are, but will perhaps add a sterner, more-hawkish statement concerning a rate hike come December’s meeting.

The U.S. dollar is up marginally against the euro and up about half a percent against the British pound. The greenback is lower against the yen as expectations for any significant dovish moves by the Bank of Japan fade.

Dollar strength dragged down gold prices but relatively strong bullish sentiment saw regular traders push the yellow metal up. The same held true for silver, but regular trading was even stronger than that for gold.

Oil prices initially edged lower today as concerns over a probable rise in U.S. crude stocks was reported. That added to worries about an already-bloated oversupply. However, that prospect outweighed rumors and comments from OPEC that a possible production freeze agreement could come sooner than was previously believed and could last longer than expected.

The CME FedWatch tool shows the probability for a rate hike tomorrow holding at 12 to 15%.

Volatility as measured by the VIX index declined as the Fed puts many markets into a bit of hibernation.

As might be expected, U.S. bond yields slipped, the 10-year moving below 1.70%. Conversely, face prices were up as is the rule.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

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