Bonds Steady Ahead of FOMC Statement

 
Snapshot: 

        -10-year Treasury yield at 2.32%; EUR/USD at 1.1266-69; U.S. stock futures edge higher; Nymex crude at $60.71; gold at $1178.50
        -Watch for: weekly mortgages; Fed rate decision, economic projections; Janet Yellen briefing; Canada wholesale trade; updates from FedEx, Oracle
        News: Currency Volatility Took $32 Billion Chunk Out of First Quarter Results; U.S. Trade Chief Defends Move Against Currency Manipulation; China Has No Current Plans to Announce Full Convertibility of Yuan Under Capital Account
        In early European trade, the euro was 0.4% higher against the dollar at $1.128 as investors continued to ponder Greece's debt crisis. Greece's prime minister lambasted creditors for their handling of his country's debt crisis on Tuesday, but suggested that the coming summit of European leaders could be the decisive moment in negotiations. A Eurogroup meeting is scheduled for Thursday.
        Sterling surged 0.6% against the dollar after data showed U.K. wages grew at the fastest pace in more than six years.
        In Asian trade, the dollar was a tad higher against the yen, with many investors avoiding taking new positions ahead of the Federal Open Market Committee's statement, projections, and press conference with Janet Yellen.
        U.S. Treasurys were unchanged in early London trade with investors cautious ahead of the FOMC outcome. The 10-year cash yielded 2.32% and the September contract was 1/32 lower at 125-280.
        According to analysts at Deutsche Bank, one important aspect of the Fed meeting will be how upbeat the Committee sounds about economic developments in the opening paragraph of the statement, as well as in Ms. Yellen's statement at the press conference. These analysts expect the message will be that things are gradually moving into place for liftoff, "but without clear indication or suggestion that it will be September, particularly given the still significant data to come between now and then."
        Elsewhere, the German 10-year bond yield was slightly higher at just over 0.80%.
        Japanese government bond prices edged up, despite widespread caution in the market ahead of the FOMC.
        Stock futures pointed to modest opening gains for Wall Street, with investors cautious ahead of FOMC decision.
        Futures for the Dow gained 56 points, or 0.3%. Those for the S&P 500 added 6.25 points, or 0.3%, and futures for the Nasdaq picked up 11.25 points, also 0.3%.
        As the Fed's two-day policy setting meeting ends, analysts expect no rate changes at this point, a big difference from earlier in the year when many economists predicted June as the lift-off month. The decision comes out 2 p.m. Eastern Time, followed by Chairwoman Janet Yellen's news conference at 2:30 p.m.
        "This meeting could give crucial hints as to not only the timing of the rate hike, but also (and probably more importantly) how quickly future hikes will take off," said Richard Perry at Hantec Markets.
        A dovish statement could spur a rally in equities, but weigh on the dollar.
        In corporate news, Bank of America earlier this year was chastised by the Fed for not anticipating problems with its "stress test" submission, a rebuke that led the firm to hire a bevy of consultants to help address the issue, according to people familiar with the matter.
        United Continental on Tuesday said it would move a fleet of 15 planes used on luxury flights to the West Coast to its Newark, N.J., hub from New York's John F. Kennedy International Airport, amid greater competition on the high-end routes.
        Canadian online lender Mogo Finance Technology priced its initial public offering slightly below the targeted share price range, but still sold enough shares to raise the anticipated amount of 50 million Canadian dollars ($40.6 million) in the issue, according to a person familiar with the matter.
        Three years after Starbucks bought the La Boulange baked-goods brand to bolster its food offerings, the coffee giant is closing the 23 pastry shops that came with it to focus on expanding the brand in house.
        Oil prices rose in early European trade ahead of an inventory data release from the U.S. Energy Information Administration. Analysts polled by The Wall Street Journal expect a decline of 1.3 million barrels. Brent crude for August delivery rose 1.4% to $64.61. On the NYME, WTI futures for July were trading up 1.3% at $60.71 a barrel.
        Gold fell 0.2% to $1178.50 per troy ounce.
        Currency Volatility Took $32 Billion Chunk Out of First Quarter Results
        Currency volatility's blow to corporate earnings and revenue is at its highest level in years-- amounting to a total cost of at least $31.7 billion for North American and European companies in the first quarter, up from $20.2 billion in the fourth quarter.
        U.S. Trade Chief Defends Move Against Currency Manipulation
        The U.S. trade czar told a top executive of Ford Motor that he's "pleased" with the latest legislation aimed at exposing overseas currency manipulation, despite criticism from Detroit and key lawmakers that the language won't prevent trading partners from weakening their currencies to gain an advantage.
        U.S. Allies in Syria Cut Islamic State Supply Line
        A quick and successful offensive by Kurdish fighters and allied rebels in a northern Syrian town has boosted a U.S.-backed effort to choke off Islamic State's supply routes and offered a template for regaining territory from the extremist group.
        Student Plotted to Detonate Bomb in New York City, Authorities Say
        Authorities have arrested a student at a college in Queens who they say was planning to build a bomb and detonate it in New York on behalf of Islamic State.
        House Gives Itself Until July 30 to Reconsider Trade Legislation
        House Republican leaders were preparing to try again to push through Congress fast-track trade legislation thwarted last week by House Democrats, using a new strategy to cobble together enough support for a top legislative priority of President Barack Obama.
        Jerry Brown, California Lawmakers Agree on Budget
        A $115.4 billion budget deal would make California the first in the nation to offer state-subsidized health care to children who are in the country illegally while expanding other social-welfare programs, Gov. Jerry Brown and legislative leaders said.
        Fed Seeks Feedback on 'Stress Tests'
        A top Federal Reserve official is reaching out to a variety of bank executives to discuss how the central bank might make its annual "stress tests" less stressful.
        China Has No Current Plans to Announce Full Convertibility of Yuan Under Capital Account
        China has no immediate plans to announce making the yuan fully convertible under the capital account, a senior Chinese foreign-exchange regulator said.
        Japan Export Growth Slows to 2.4%
        Japanese exports grew at the slowest pace in nine months in May as shipments to the U.S. and China moderated, while export volumes for the month fell compared with a year earlier.
        Write to Riva Gold at riva.gold@wsj.com @GoldRiva
        (END) Dow Jones Newswires

        June 17, 2015 05:50 ET (09:50 GMT)

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