Skip to main content

The Globe and Mail

Premarket: European stocks, oil rise as Fed decision looms

A man walks by an electronic stock board of a securities firm in Tokyo, Wednesday, March 15, 2017. Asian stocks were mixed as the Fed met to decide on whether to hike interest rates in view of improvements in the U.S. economy.

Koji Sasahara/AP

Crude prices were once again a dominant story in markets, with oil's rebound helping underpin European stocks as investors wait for Wednesday's expected U.S. interest rate increase. The British pound pared a rebound and metals climbed.

West Texas Intermediate oil jumped above $48 a barrel after an industry report pointed to falling crude stockpiles in the U.S. A broader recovery of commodities spurred the Stoxx Europe 600 Index higher, with miners driving many of the gains. The pound trimmed an advance after data showing wage growth slowed, while the dollar slipped against most of its major peers.

The swings in oil added some drama to financial markets that have entered a two-day period brimming with central bank decisions, European political drama and a raft of economic data. With the Federal Reserve seen as all but certain to raise rates, investors have been weighing how precarious energy prices will feed into the central bank's path for future moves.

Story continues below advertisement

"If you're excited about whether Fed Chair Janet Yellen will say anything about the number of hikes this year, I think you will be disappointed," Henrik Drusebjerg, chief strategist at Carnegie Investment Bank AB said in an interview with Bloomberg Radio's Nejra Cehic and Markus Karlsson. "The Fed has come to use a new term that they will use the window when they have it. If the economy is strong, they will continue hiking."

What investors will be watching:

The Fed's decision will be announced at 2 p.m. in Washington, followed by Chair Janet Yellen's news conference a half hour later. Investors are focused on any hints of a change in the number of increases the central bank foresees this year.

Wednesday's vote in the Netherlands will deliver a reading on the state of populism in Europe as races in France and Germany heat up.

The Bank of Japan is set to keep its rates and yield-curve policy unchanged in its policy decision on Thursday. The Bank of England, Swiss National Bank and Bank Indonesia are also expected to stand pat with policy decisions.

U.S. Secretary of State Rex Tillerson travels to Japan, South Korea and China in his first visit to the region since taking office.

U.S. President Donald Trump's first budget outline for fiscal 2018 is expected on Thursday. He's said he'll seek a $54-billion boost in defense spending, paid for by an equal amount of cuts to non-defense agencies.

Story continues below advertisement

Here are the main market moves: Asia

Stocks in Asia were mixed. Hong Kong shares pared declines as Chinese Premier Li Keqiang played down the risk of a trade conflict. Speaking at a press conference after the close of the annual National People's Congress, Li said it's important for both China and the U.S. to keep talking to build trust.


WTI gained 1.7 per cent to $48.54 as of 10:03 a.m. in London. U.S. inventories fell by 531,000 barrels last week, the industry-funded American Petroleum Institute was said to report.

Gold climbed 0.3 per cent to $1,202.24 an ounce after falling 0.4 per cent Tuesday.

Iron ore jumped 3.4 per cent, adding to a 4.3 per cent advance in the previous session.

Story continues below advertisement


The Bloomberg Dollar Spot Index slipped by 0.2 per cent.

The British pound pared gains after wage growth slowed. A YouGov poll for The Times showed that 57 per cent of Scottish voters want to remain inside the U.K. compared to 43 per cent who seek independence. It traded 0.4 per cent higher after jumping as much as 0.9 per cent earlier.

The euro rose by 0.3 per cent to $1.0629, following its 0.5 per cent drop a day earlier.


The Stoxx Europe 600 Index climbed 0.2 per cent as mining companies rallied 1.8 per cent as a group.

Futures on the S&P 500 added 0.3 per cent. The benchmark index slipped 0.3 per cent on Tuesday.

Bonds The yield on 10-year Treasury notes fell two basis points to 2.584, after slipping three basis points in Tuesday trading.

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles. We hope to have this resolved by the end of January 2018. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to