Dollar strengthening slows ahead of Fed meeting
US stock market retreated on Monday ahead of Federal Reserve two-day meeting starting today. Equities fell as US and Chinese reciprocal tariffs took effect – 10% tariffs on $200 billion worth of Chinese goods counterweighed by $60 billion in tariffs on US goods by China. The S&P 500 fell 0.4% to 2919.37. Dow Jones industrial lost 0.7% to 26562.05. The Nasdaqcomposite index however recovered 0.1% to 7993.25. The dollar strengthening slowed with Fed widely expected to hike rates a quarter point and the Chicago Fed’s national activity index came in unchanged in August: live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.04% to 94.219 and is higher currently. Futures on stock indices indicate higher openings today.
FTSE 100 opens higher than other European markets
European stocks pulled back on Monday. The EUR/USD reversed the slide on European Central Bank President Mario Draghi’s comment he expected a rise in consumer prices. The GBP/USD joined EUR/USDs climb after UK Brexit Secretary Dominic Raab’s comment Brexit negotiations would go on. Both pairs are moving higher currently. The Stoxx Europe 600 index fell 0.6%. The DAX 30 slid 0.6% to 12350.82 and France’s CAC 40 slipped 0.3%. UK’s FTSE 100 lost 0.4% to 7458.41.
HK500 leads Asian indices retreat
Asian stock indices are continuing the slide after markets opened following a holiday as China accused the United States of engaging in “trade bullyism”. Nikkei however rose 0.3% to 23940.26 helped by accelerated yen slide against the dollar. Chinese stocks are lower as China’s Vice Commerce Minister said when US-China talks can restart would depend on the “will” of the United States: the Shanghai Composite Index is down 0.6% and Hong Kong’s Hang Seng Index is 1.6% lower. Australia’s All Ordinaries Index slipped 0.02% as Australian dollar is essentially unchanged against the greenback.
Brent futures prices are extending gains today on back of OPEC and Russia reluctance to raise output to offset the expected supply shortfall after US sanctions against Iran. Prices jumped yesterday: November Brent crude rallied 3.1% to $81.20 a barrel on Monday.