• The dollar was on tenterhooks, trading sideways against major rivals on Wednesday as investors awaited the outcome of the Federal Reserve’s meeting at which it was expected to announce plans to trim its $4.2 trillion in bond holdings.
The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 91.739, though it remained well above its more than 2-1/2 year low of 91.011 plumbed on Sept. 8.
The U.S. currency inched 0.1 percent lower against its Japanese counterpart to 111.45 yen, but remained within sight of an eight-week peak of 111.88 yen scaled overnight.
The euro added 0.1 percent to $1.2007, moving closer to its Sept. 8 high of $1.2092, its loftiest since January 2015.
• Some strategists say that creates the opportunity for a sudden wake up call and a rush of volatility when the Fed releases its statement at 2 p.m. Fed Chair Janet Yellen briefs the media at 2:30 p.m. ET.
Chances are that the market continues to have a muted response, but some bond pros say the announcement could also jolt the markets one way or other, depending on the Fed's tone and its forecast for interest rates.
The Federal Open Market Committee is expected to announce Wednesday afternoon that it will start to reverse quantitative easing, the massive bond buying program it initiated during the financial crisis to save the economy. Now with $4.5 trillion in assets on its balance sheet, the Fed is taking the step of moving away from the final stages of that program, which has been to replenish those bonds as they mature.
• The Fed has continued to act like speculators, placing bets on the prospects of fiscal stimulus and hotter growth. And they've proven not to be very good.
Remember, they finally kicked off their rate "normalization" plan in December 2015. With things relatively stable globally, the slow U.S. recovery still on path, and with U.S. stocks near the record highs, they pulled the trigger on a 25 basis point hike in late 2015. And they projected at that time to hike another four times over the coming year (2016).
• Unemployment is the biggest risk for businesses globally, according to a World Economic Forum survey of business leaders published on Wednesday.
The company executives put unemployment or underemployment as the top risk over the next 10 years, followed by fiscal crises and the failure of national governance, data from the WEF’s Executive Opinion Survey showed.
• British employers are their most pessimistic about the outlook for the economy since last year’s Brexit vote and want clarity about the departure from the European Union, a survey showed on Wednesday.
However confidence in hiring and investment remained stable this month, the survey by the Recruitment & Employment Confederation, representing recruitment firms, showed.
• Angela Merkel is likely to win a fourth term as chancellor after a national election on Sunday but business leaders are already warning her that the next government must implement growth-friendly policies to ensure Germany remains the euro zone's largest economy.
Ahead of Sunday's election, the latest opinion poll by the Frankfurter Allgemeine Zeitung newspaper on Tuesday showed Merkel's conservative alliance of the Christian Democrats and its sister Christian Union party (CDU-CSU) with 36.5 percent of the vote, followed by her main rivals, the SPD with 22 percent of the vote.
In third place was the anti-immigration AfD party on 10 percent, the poll conducted by Allensbach showed the business-friendly Free Democrats (FDP) with 11percent of the vote and the Greens with 8 percent. The Greens and FDP are predicted to be the most likely coalition partners with Merkel's CDU-CSU.
• Oil prices rose on Wednesday after Iraq’s oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories.
U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.6 percent, at $49.78 a barrel at 0644 GMT. Brent crude futures climbed 22 cents, or0.4 percent, to $55.37.
Reference: Reuters,CNBC
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