· The dollar weakened against a basket of currencies on Tuesday in advance of a Federal Reserve meeting where policymakers are expected to decide on shrinking the central bank’s $4.2 trillion in bond holdings.
· Analysts widely anticipate Fed policymakers to announce a lowering of monthly bond purchases, starting in October, when their two-day meeting ends on Wednesday. They expect Fed officials would leave the door open for a rate increase at their Dec. 12-13 meeting.
· The futures market implied traders saw a 58 percent chance of a rate increase at year-end, CME Group’s FedWatch showed.
· An index that tracks the dollar against six currencies was down 0.3 percent at 91.780, not far from the more than 2-1/2 year low of 91.011 set on Sept. 8. The greenback drifted 0.1 percent lower at 111.47 yen, below its eight-week peak of 111.87 set earlier on Tuesday.
· ECB policymakers disagree on whether to determine a fixed date to end the programme when they meet in October, as the euro has jumped, Reuters reported.
· U.S. homebuilding fell for a second straight month in August as a rebound in the construction of single-family houses was offset by persistent weakness in the volatile multifamily home segment.
The mixed readings suggested housing could remain a drag on economic growth in the third quarter. Homebuilding has been treading water for much of this year amid shortages of land and skilled labor as well as rising costs of building materials.
· U.S. President Donald Trump gave a fiery speech in front of the United Nations in New York Tuesday. Trump talked very tough on North Korea’s missile program, and on Iran and Venezuela. He said “rocketman is on a suicide mission” and the U.S. would completely destroy North Korea if that nation initiates military action against another sovereign nation.
· The Trump administration and top U.S. Senate Republicans pushed on Tuesday for action on a bill to dismantle Obamacare, but time was running out and they were still hunting for the votes needed to pass their latest attempt to gut the 2010 healthcare law.
Vice President Mike Pence lunched with Republican lawmakers on Capitol Hill to urge them to approve the legislation introduced last week by Republican Senators Lindsey Graham and Bill Cassidy. Pence said President Donald Trump backs the bill.
“Now is the time. We have 12 days” to pass it, Pence said before the lunch.
· After Sept. 30, the last day of the fiscal year, procedural rules will make it much more difficult for Republicans. The bill after Oct. 1 would need 60 votes in the 100-seat Senate to be brought up for consideration, rather than a simple majority until the end of the month.
· U.S. Senate Republicans have reached a tentative budget deal that could allow tax reform legislation to eliminate as much as $1.5 trillion in revenues over 10 years through tax cuts, raising the odds that their planned tax overhaul would expand the federal deficit.
The agreement was expected to be announced formally this week, according to lawmakers and aides.
· The Trump administration is preparing to make it easier for American gun makers to sell small arms, including assault rifles and ammunition, to foreign buyers, according to senior U.S. officials.
· Oil prices edged lower on Tuesday, retreating from near-five-month highs in advance of data expected to show a build in U.S. crude inventories as imports resume and refineries were still restarting after recent storm activity.
Brent crude futures LCOc1 were down 30 cents at $55.20 a barrel by 2:30 p.m. EDT (1830 GMT), not far off a five-month high of $55.99. U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 35 cents to $49.56.
· The market, however, remained buoyant ahead of Friday’s meeting between the Organization of the Petroleum Exporting Countries with non-OPEC producers to discuss progress of their 1.8-million barrel-per-day supply cut deal.
OPEC’s second-biggest producer Iraq said that the group was discussing several options for its supply pact, including an extension beyond March and a further output cut.
Nigeria and Libya will send representatives to the meeting despite being exempt from the current deal, two OPEC sources said. Rising output from both countries has kept a lid on price gains, prompting suggestions that they could be included in the deal.
Reference: Reuters, Kitco
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