June 13, 2017
Traders are expecting the Fed to raise rates, the ECB to exclude Greece, and the tech rout to take a breather. Here are some of the things people in markets are talking about today.
The Federal Open Market Committee’s two-day meeting begins today, with an interest-rate increase all but certain to be announced on Wednesday. Treasuries were fractionally higher, even while low inflation expectations are reanimating bond bears. Elsewhere in Washington, Attorney General Jeff Sessions will testify at a hastily convened session of the Senate Intelligence Committee today, while late on Monday, the Trump administration laid out its highly anticipated plan for overhauling bank regulation, calling on the government to ease — though not eliminate — many of the restraints that were imposed on Wall Street after the financial crisis.
EU: So, derivatives…
Elsewhere in contentious banking regulations: The European Union is pushing ahead with a politically charged plan to assert control over the clearing of euro-denominated derivatives, in a step that could force firms to move from London to the European Union after Brexit. Meanwhile, the European Central Bank is unlikely to include Greek bonds in its asset-purchase program for the foreseeable future, a person familiar with the matter said, as euro-area finance ministers meet in Luxembourg later this week to discuss the debt-relief measures that the ECB has said are needed before it will consider purchasing Greek bonds.
The pound was, by 5:40 a.m. Eastern Time, on course to eke out its first gain since the June 8 election, as Theresa May bought herself a stay of execution by taking responsibility for the election fracas that lost her government its majority. The prime minister’s agenda is marred by some glaring delays (to the Queen’s Speech and to the start of Brexit talks), as she meets with Democratic Unionist Party leader Arlene Foster to try to secure the votes needed to prop up her minority government. Inflation data showed that U.K. prices increased by the fastest pace in four years last month, rising a greater-than expected 2.9 percent. The prime minister may find it harder than ever to keep the lights on.
Almost every industry group in the Stoxx Europe 100 Index traded in the green by 4:50 a.m. Eastern Time, with technology shares poised for the largest gain in three weeks, as yesterday’s selloff looked unlikely to maintain its clip. Australian equities enjoyed the sharpest rally in 2017, as bank stocks jumped after investors returned from a holiday. With no help from Samsung, South Korea’s Kospi registered a 0.7 percent jump. S&P 500 futures also pointed to a modest rise.
Oil advanced for a third day in anticipation of U.S. government data that’s forecast to show that crude stockpiles resumed declines after their unexpected rise. Inventories are forecast to have slid by 2.25 million barrels last week, according to a Bloomberg survey before Wednesday’s Energy Information Administration report. Still, Brent crude is forming a so-called death cross for the first time since 2014, a slowing of momentum that many perceive as a bearish signal.