Economy

Stocks, dollar flat as investors brace for Fed statement

The main event, however, will be the Fed's meeting on Tuesday and Wednesday, at which it is likely to take another step toward policy normalization in what is rapidly becoming a worldwide trend.

This prospect may be prompting the sell-off in sectors such as utilities, while it is boosting banks, said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. There's lots of cash.

"Yes, the Fed has just told us they are going to continue tightening policy, but the likes of the European Central Bank, the Bank of Canada and even the Bank of England now have also told us that they are going to start normalizing policy", said Nelson. "That continues to lead to money flowing into the market nearly in an indiscriminate fashion", he said.

Markets are now pricing in a more than 50 percent chance of a Fed hike by the end of the year, up from only around a 40 percent chance less than a week ago, according to CME FedWatch, having brought forward their bets after a strong United States inflation print last week.

In the bond market, benchmark 10-year notes were last up in 3/32 price to yield 2.232 percent, from 2.243 percent on Tuesday.

That marked a rise of 22 basis points from 10-month lows set on September 8, when USA bond yields fell on risk aversion, partly stemming from concerns about U.S. Hong Kong's Hang Seng Index was down 0.06 percent.

The index that measures the dollar's strength against a basket of currencies dipped 0.1 percent on the day to 92.451 after rising more than 1 percent after the Fed meeting to its highest level in two weeks.

Currencies were little moved by the Bank of Japan's widely expected decision to stand firm on monetary policy.

The yen has also been under pressure due to political tensions with North Korea and Japanese Prime Minister Shinzo Abe's call for a near-term election which was spurred by an improvement in his recent approval ratings and notable internal chaos within his main opposition party.

Meanwhile, traders have been speculating whether the European Central Bank is moving closer to wind down its 2.3 trillion euro (S$3.7 trillion) asset purchase program.

The Dow Jones Industrial Average rose 9.85 points, or 0.04 percent, to 22,380.65, the S&P 500 lost 0.67 points, or 0.03 percent, to 2,505.98 and the Nasdaq Composite dropped 21.10 points, or 0.33 percent, to 6,440.23. Amazon Web Services said it will start charging its customers by the second for use of its popular EC2 virtual slices of servers in its data centers, according to a CNBC report. It later edged back slightly to 112.540 yen, still 0.3 percent up on the day.

The euro was up 0.35 percent at $1.1933.

USA crude oil prices slipped below US$50 per barrel but stayed close to multi-month highs as refineries in Texas continued to restart after Hurricane Harvey.

USA crude futures rose 2 cents to settle at $49.91, while Brent crude futures were down 32 cents at $55.44.



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