Dollar Unchanged Ahead of Fed

 
Snapshot: 

        -Dollar steady; 10-year Treasury yield at 2.257%; U.S. stock futures higher; Nymex at $47.64; gold at $1096.40
        -Watch for: FOMC interest rate decision and policy statement; IMF's Lagard press conference; June pending home sales; earnings from Anthem, Humana, Northrop Grumman, General Dynamics, MasterCard, Carlyle Group, Apollo Global, Thomson Reuters, First Quantum, Kinross Gold, and after the close: Facebook, Whole Foods, Mylan, LifeLock
        News: Lew Says No Federal Bailout for Puerto Rico; Police Count 2,000 Migrant Attempts to Sneak Into Eurotunnel
        The dollar was almost unchanged against the yen and the euro during Asian trade Wednesday, with investors avoiding taking strong positions ahead of the outcome from the Fed meeting.
        Investors were largely taking wait-and-see stance ahead of the meeting that may shape their view regarding a potential rate increase as early as in September.
        But the dollar remained steady against the yen partly because of a strong appetite among Japanese corporate investors to buy the greenback, as they feel the heat from a recent string of massive outbound M&As by Japanese companies, said Yukio Ishizuki at Daiwa.
        The euro was 0.2% lower against the U.S. dollar at $1.1046 in early European trade and the dollar was little changed against the Japanese yen at around Y123.64 early Wednesday, as Chinese markets continued to stabilze following a dramatic sell-off earlier in the week. Trading volumes are expected to remain thin and investors cautious, however, ahead of a policy statement from the Fed later in the session.
        U.S. Treasury bonds continued to pull back slightly as stock markets around the world rebound, following a tumultuous start to the week in China. Early in the European session, at 02.40am ET, the yield on the benchmark 10-year Treasury note was 2.257%, marginally higher on the day. The yield on the two-year note was 0.696%. Traders are saying, however, that many appear to be adopting a wait-and-see approach ahead of the Fed statement.
        U.S. stock futures notched up early Wednesday, putting Wall Street on track to build on Tuesday's gains, though big moves are unlikely while investors wait for a Federal Reserve statement due later.
        S&P 500 futures rose 4.80 points, or 0.23%, while those for the Dow tacked on 46 points, or 0.26%. Nasdaq futures added 11 points, or 0.25%.
        On Tuesday, the U.S. stock market climbed and halted a five-session losing streak as the Dow gained nearly 190 points and fears about recent China's stock selloff abated somewhat. The S&P 500 jumped 1.2% for its biggest rise in more than two months.
        The Fed is wrapping up a two-day meeting and will release a brief statement at 2 p.m. Eastern Time. No news conference has been scheduled.
        While the Fed is unlikely to tip its hand about whether it will raise interest rates at its September meeting, investors nonetheless will read its latest policy statement closely.
        "A July rate hike looks unlikely, but a September liftoff appears to be well on the way to being priced into currency markets, so any hints that come out of the statement could have a significant impact on trading," said Colin Cieszynski at CMC Markets.
        Corporate earnings will also be in focus. Before the open, Humana, MasterCard, and Altria are among the companies slated to deliver quarterly results. Whole Foods and Facebook results are due after the closing bell.
        European stocks rose, cheered by a further stabilization in Chinese equity markets, but trading volumes were expected to remain thin and investors cautious ahead of a policy statement from the U.S. Federal Reserve later in the day.
        The Stoxx Europe 600 added 0.6% early in the session, building on Tuesday's 1.1% gain. China's shares oscillated between gains and losses Wednesday as officials stepped up efforts to calm markets on the back of three days of selling that has knocked 11% off the value of China's main stock index and severely unnerved global investors.
        "Sentiment towards China remains highly volatile," said Ian Williams at Peel Hunt. He added, however, that investors broadly appear calmer early Wednesday than they might have a day ago.
        Oil futures fell as investors braced for the latest U.S. supply data and the outcome of the Fed meeting.
        After rallying earlier in the year, oil prices have fallen more than 20% in recent weeks--the definition of a bear market--as oversupply fears have resurfaced amid persistently high U.S. production, record output from other major producers and the Iranian nuclear deal.
        "We believe the usual fears are at play--up to 1 million barrels a day of increased exports from Iran, rebounding U.S. shale production and a stronger U.S. dollar," said Hamza Khan at ING. "However, little has changed from a physical perspective to induce such losses."
        Brent crude, the global oil benchmark, fell 0.8% to be at $52.88 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading 0.7% lower at $47.64 a barrel.
        The bullion market is focused on Wednesday's release of the latest statement from the Fed.
        "While the market has priced in the possibility of a rate hike given Ms. Yellen's testimony, a hawkish policy statement may continue to put pressure on gold," said James Steel at HSBC.
        At 03.32am ET, spot gold was flat at $1,096.40 an ounce.
        Lew Says No Federal Bailout for Puerto Rico
        Treasury Secretary Jacob Lew said the Obama administration isn't contemplating a federal bailout for Puerto Rico as the island territory faces a cash crunch.
        Siemens, Bombardier in Talks on Train Merger
        German industrial conglomerate Siemens is in talks to combine its rail unit with Canada-based Bombardier's train business, people familiar with the matter said.
        Police Count 2,000 Migrant Attempts to Sneak Into Eurotunnel
        The number of attempts by migrants to sneak into the Eurotunnel terminal near the French port city of Calais reached 2,000 during the night between Monday and Tuesday, said a spokesman for the company operating the railway tunnel linking the U.K. and the continent.
        Man Dies as Migrants Try to Storm Eurotunnel Terminal
        A Sudanese man was found dead in the French port town of Calais after about 1,500 migrants attempted to enter the Channel Tunnel railway terminal in a desperate bid to cross over to the U.K.
        Write to Sarka Halas at sarka.halas@wsj.com
        (END) Dow Jones Newswires

        July 29, 2015 06:11 ET (10:11 GMT)

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