Ahead of the US Federal Reserve's (FED) interest rate decision on September 18 (1am tomorrow - September 19 Vietnam time), the world stock market is in a state of waiting. Investors expect the FED to cut interest rates for the first time in more than 4 years, with the possibility of cutting from 0.25 - 0.5 percentage points. This causes global indices to fluctuate slightly, as the market considers the possibility that the US economy may "soft land" (growth slows down but not recession) after a prolonged period of interest rate hikes.
European stocks were flat on September 18 as investors stayed on the sidelines ahead of a key Fed decision on interest rates that could signal the start of a monetary easing cycle in the world's largest economy. The pan-European STOXX 600 index fell 0.1% to 516.84 points.
In the UK, stocks fell after a more than adequate inflation report and as investors awaited the Fed’s highly anticipated but uncertain policy decision. London’s FTSE 100 and the FTMC mid-cap index both fell 0.2%. Both indexes closed at their highest levels since early September on Tuesday (17 September).
While U.S. stocks were flat on September 17 as the market awaited the Fed's key interest rate cut decision, the Dow Jones Industrial Average fell 15.90 points, or 0.04 percent. The S&P 500 gained 1.49 points, or 0.03 percent. The Nasdaq Composite added 35.93 points, or 0.20 percent.
In Asia, Japanese shares were the only major gainers in the region, with the Nikkei N225 average rising 0.72% to erase a 1% drop from September 17, as the benchmark index continued to be affected by the dollar-yen exchange rate. Chinese blue chips CSI300 opened flat after returning to work following an extended weekend.
In terms of exchange rates, the dollar index fell sharply against the Japanese yen, losing a third of its gains since September 17, when unexpectedly strong US retail sales data was seen as undermining the case for aggressive easing by the Fed. The euro also rose, recouping almost all of the previous day’s losses.
The Fed is almost certain to cut interest rates for the first time in more than four years as the US central bank begins to reverse the restrictions it imposed to fight inflation, but whether policymakers opt for a 0.5 percent cut or a smaller move remains unclear, analysts say.
Commenting on this, Michael Bailay, director of research at FBB Capital Partners, said: “Usually the Fed will do exactly what the market expects at the last minute and that has been seen historically. However, this time it could be a little interesting because the market is almost 50/50. They are leaning towards a 50 basis point cut and that could be what happens. But because it is close to 50/50, there is a chance that something a little different from the market, we could see some surprises and volatility, we will have to see on September 19.”
Source: https://vov.vn/thi-truong/thi-truong-chung-khoan-the-gioi-cho-doi-thoi-diem-fed-ha-lai-suat-post1122342.vov
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