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Global Stocks Move Higher as Geo-Political Tensions Ease; USD Higher ahead of Fed Meeting

Published September 18, 2017
  • The US dollar benefited from a stronger start this week due to a rise in US Treasury Yields and a heavy focus on the run up to this week’s Federal Reserve meeting; the Fed is likely to keep interest rates unchanged, however traders will watch for insights on the future trajectory of US interest rate hikes as well as the Fed’s plan to decrease their $4.5 trillion balance sheet
  • Current market probabilities for a US interest rate hike stand at 0% for this week’s meeting, with the market currently not expecting the Fed to raise rates until March 2018; market expectations for an interest rate hike from the Bank of Canada stand at 53% in October
  • Global stocks continued to rise this morning after markets largely shrugged off North Korea’s latest missile test on Friday; Asian shares fared exceedingly well, hitting their highest level since late 2007
  • South Korean, Hong Kong and mainland Chinese markets all hit a record high while Japanese markets remain closed for public holiday; European shares hit 6 week highs, with Portuguese stocks performing especially well after the country’s credit rating rose to investment grade status after more than 5 years
  • Oil prices continue are lower this morning however are holding near the five-month highs seen last week; oil refineries along the Gulf of Mexico continue to restart operations after recovering from the disruptions brought on by Hurricane Harvey
  • The commodity’s price is also benefiting from stalling growth in the US shale industry; the Baker Hughes oil rig count showed that number of active oil rigs fell by 7 last week, bringing the total number of rigs to 749, the lowest level since June 2017