European stocks and US futures made small gains, while crude oil rose, as traders prepared for a rush of monetary policy announcements from central banks around the world.
The region-wide Stoxx Europe 600 index was up 0.1 per cent in early afternoon trade, with positive moves for real estate, financials and energy stocks balanced out by declines for healthcare groups and industrials. London’s FTSE 100 also rose by 0.1 per cent and France’s Cac 40 added 0.2 per cent.
China’s benchmark CSI 300 index fell 0.2 per cent while Japan’s Topix was up 0.1 per cent as markets reopened after a holiday.
In the US, contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq 100 both rose less than 0.1 per cent ahead of the New York opening bell.
The muted moves in equity markets came ahead of the US Federal Reserve’s meeting on Wednesday, with markets pricing in a 99 per cent chance that interest rates remain unchanged.
More important for investors will be what rate setters say about November’s meeting, as well as the Fed’s “dot plot” of interest rate expectations. The UK, Switzerland and Japan are among the other countries whose central banks are meeting this week.
“Until we get those communications, what’s the sense in pushing prices in a particular direction?”, said Mike Zigmont, head of trading at Harvest Volatility Management. “I’m sticking with the we’re-on-hold-until-the-Fed-tells-us-something narrative.”
The latest data on US consumer prices bolstered fears that the Fed’s last push to bring inflation back to its 2 per cent target might take longer than expected. Rising energy costs pushed the headline figure above forecasts, to 3.7 per cent in August.
Brent crude, the international benchmark, extended gains into a fourth successive trading session, rising above $95 a barrel at $95.62. West Texas Intermediate, the US equivalent, added 1.8 per cent to $93.08. Both benchmarks touched their highest price in 10 months earlier in the day.
The gains have been spurred by news earlier this month that two of the world’s top producers, Saudi Arabia and Russia, will extend supply cuts until the end of year.
Traders fretted that the uptick in oil prices could hamper central banks’ efforts to tame inflation in the US and Europe, adding to the banks’ case for keeping interest rates higher for longer, despite indications suggesting that global economic growth is slowing.