[1/2]A trader works at the stock exchange in Frankfurt, Germany, February 22, 2022. REUTERS/Timm Reichert acquire license rights
LONDON/TOKYO, Sept 19 (Reuters) – Global stocks edged higher on Tuesday while the dollar traded just below its highest level in six months, with traders avoiding big bets ahead of rate decisions. interest of the Federal Reserve, the Bank of England and the Bank of Japan. the coming days.
Oil prices continued to rise, with international benchmark Brent crude surging above $95 to reach its highest level since November 2022.
The MSCI world stock index (.MIWD00000PUS) rose just 0.06% after falling 0.24% on Monday. The MSCI Asia index, which excludes Japan (.MIAPJ0000PUS), slipped 0.11%.
The pan-European STOXX 600 index (.STOXX) is up 0.13%. Britain’s FTSE 100 (.FTSE) rose 0.14% while Germany’s DAX (.GDAXI) fell 0.06%.
The key event for investors this week is the Fed’s interest rate decision on Wednesday.
Although the central bank is expected to keep borrowing costs between 5.25% and 5.5%, traders will be watching for clues on how long the Fed is likely to keep rates around current levels. After a strong run of U.S. data, speculation intensified that the bank could adopt a tougher tone.
US S&P 500 futures rose 0.11% after the stock index finished slightly higher on Monday. Nasdaq futures were up 0.1%.
“The whole debate has now shifted from where the peak in rates is to how long to stay at the peak,” said Duncan MacInnes, chief investment officer at British firm Ruffer.
“Given that the economy continues to surprise with its robustness, given that risk assets in particular have surprised with their robustness, why not, if you were in (Fed Chairman) Jerome Powell’s shoes, say how much you think so.”
The dollar index, which rates the currency against six of its major peers, fell 0.1% to 104.98, close to Thursday’s six-month high of 105.43.
Investors and central bankers face a sharp rise in oil prices as demand has recovered, but Saudi Arabia and Russia have limited supply.
Brent crude futures, the global oil benchmark, rose to $95.33 a barrel, the highest since November 2022, and were last up 0.56% at $94.97.
U.S. West Texas Intermediate crude futures rose 1.16% to $92.54 after also touching their highest level since last November.
Samuel Zief, head of global foreign exchange strategy at JPMorgan Private Bank, said central banks should not be too concerned about rising oil prices, which he said should ease as economies slow .
“What central banks are really, really focusing on is not so much supply-side energy shocks anymore, but rather the tricky part of the services inflation basket,” he said.
“Choose whichever central bank you want, they say either they’re already done or they’ll do one more hike and they’ll take a break.”
The Bank of England will set policy on Thursday and is expected to raise rates by 25 basis points to 5.5%, which many investors believe will be the last hike of the cycle.
The Bank of Japan is expected to leave rates unchanged in negative territory on Friday, although it will also be scrutinized for clues on the outlook after Governor Kazuo Ueda suggested he would move away from ultra-accommodative policy.
In Asia, the Japanese Nikkei (.N225) fell 0.87% under the weight of significant losses in chip-related stocks, including Tokyo Electron (8035.T).
Japanese markets were closed on Monday as Asian technology stocks sold off following a Reuters report that TSMC (2330.TW) had asked its major suppliers to delay deliveries.
Reporting by Harry Robertson in London and Kevin Buckland in Tokyo; Additional reporting by Lewis Jackson; Editing by Stephen Coates, Bernadette Baum and Chizu Nomiyama
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