Fed approves October reversal of historic stimulus, leaves rates unchanged

Federal Reserve policymakers led by Fed Chair Janet Yellen will review interest rates at their two-day meeting starting Tuesday. They’re expected to hold rates steady

Federal Reserve policymakers led by Fed Chair Janet Yellen will review interest rates at their two-day meeting starting Tuesday. They’re expected to hold rates steady

If the focus is on the repurchase of short-term assets, that would likely push the long end of the yield curve higher, driving investors' attention also to shares of banks, which would theoretically make more money with the help of higher net interest margins, said Morganlander.

The core personal consumption expenditure (PCE) price deflator, the Fed's favoured measure of consumer price rises, rose by an annual 1.4% in July, down from 1.5% in the prior month. "Now on the way out, if the idea is that the Fed is not as stimulative as it once was, it might have the effect of depressing bond yields".

ASIA'S DAY: Japan's benchmark Nikkei 225 added almost 2.0 percent to finish at 20,299.38, coming off a national holiday on Monday. The Dow Jones industrial average edged up 14 points, or 0.1%, to 22,385.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for policy, including details of how the central bank plans to start shrinking its USD4.5 trillion balance sheet.

The New Zealand dollar hit its strongest in more than a month at $0.7374 after a poll showed the ruling National Party regaining a wide lead over the opposition before Saturday's election. Apple fell $3.32, or 2.1 percent, to $155.41. Oil stocks have also gained while there is a slight drop in major miners such Fortescue Metals and Rio Tinto following its announcement that chief financial officer Chris Lynch will retire next year.

Technology stocks were down in Seoul, with Samsung Electronics shedding 0.69% after it reached a record high on Monday. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined this year and are running below 2 percent.

Analysts forecast crude inventories rose by about 3.5m barrels in the week ended September 15. The Nasdaq Composite Index rose 6.68 points to 6,461.32, a gain of 0.1%.

Stocks are narrowly higher in early trading on Wall Street as investors wait to hear from the Federal Reserve. Brent crude, used to price global oils, was up $1.05, or 1.9%, to $56.19 a barrel in London. It's now sputtering at 1.4 percent.

Bed Bath and Beyond plunged 17 percent after reporting earnings and sales that missed analysts' forecasts.

Foreign exchanges were also seeing little movement before the United States central bank's meeting ends, with the dollar essentially flat, although the Mexican peso was down after an natural disaster killed more than 200 in that country. In Asia, Japan's Nikkei 225 added 0.1 percent and South Korea's Kospi slipped 0.2 percent.

In Australia, the S&P/ASX 200 was 0.12% softer at 5,713.58, with the hefty financials subindex down 0.02% by end of play.

"She wants to communicate as little new information as possible", said Wright, a former New York Fed economist, making the point that the FOMC will see three more months of data before its meeting in December.

The market is already struggling with a scarcity of benchmark 10-year notes, which can be hard to borrow due to the U.S. Treasury Department's auction schedule.

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