Record high stock brace for Federal Reserve stimulus

London — Wednesday’s global stock market traded at record highs, but yields on dollars and Treasuries fell as investors began cutting financial stimulus in the pandemic era towards the world’s largest economy. ..

The Federal Reserve Board of Governors will announce a reduction in its $ 120 billion monthly asset purchase program in a policy statement at 1800 GMT. It is widely seen as a new chapter in the global policy response to COVID-19.

The European stock market was open and set a new record high after Wall Street’s major index also set a new record on Tuesday.

US futures pointed to the flat opening of the next session on Wall Street, but MSCI’s national global index, which tracks equity performance in 50 countries, rose 0.02%, just a whisker from a new milestone.

The Tokyo Stock Exchange was closed due to a public holiday, but MSCI’s widest non-Japanese Asia-Pacific stock index fell 0.04 percent.

Boosted by fiscal and monetary stimulus, global equities prospered during the recovery of the global economy following the recession caused by the first wave of COVID-19 infection in 2020.

Salman Ahmed, Macro Head of Fidelity International, said:

Negative real interest rates are a very powerful force, “he added.

The board above the trading floor of the New York Stock Exchange shows the closing price of the Dow Jones Industrial Average on November 2, 2021. (Richard Drew / AP photo)

The market is almost certain that the Fed will taper, but it’s seeing if policymakers can give hints on potential rate hikes next year.

The Federal Reserve Board of Governors balances raising interest rates to keep inflation under control and giving the economy as much time as possible to recover jobs lost after the pandemic. I’m trying.

Meanwhile, the Bank of England could become the first major central bank to raise borrowing costs when policymakers meet Thursday after the coronavirus crisis.

Monetary market movements were limited on Wednesday, with the US dollar index down 0.07% against the baskets of major peers to 94.036.

The Australian dollar rose 0.24% after falling 1.2% the day before, despite abandoning its short-term yield target following a dovish statement from the Reserve Bank of Australia.

The US benchmark 10-year Treasury yield was slightly lower at 1.5226%, below last month’s recent high of 1.7%.

Oil prices fell as industry data showed a significant increase in oil inventories in the United States, the world’s largest consumer of oil, and pressured OPEC to increase supply.

Brent crude fell 1.7% to $ 83.28 a barrel and US crude fell 1.5% to $ 82.65 a barrel.

Spot gold fell 0.25%.

By Julien Ponthus and Alun John