With only hours to go before the announcement from the U.S. Federal Reserve as to whether it will raise interest rates, Asian shares traded slightly higher. The announcement is due at 1900GMT, and traders are expecting not only the first rate hike in a year, which is expected to be a quarter point. Fed Chair Janet Yellen is due to speak a half hour after the announcement, though Fed watchers are beginning to question just how much she will forecast about future moves. Other notable economic reports will be out before the Fed announcement, including November retail sales, industrial production and business inventories reports.
In advance of the Fed announcement the two-year yield, the Treasury that is most sensitive to rate hikes, hitting 1.17 percent, its highest level in six years. The 10-year yield remained stable at 2.47 percent. The euro traded at $1.0635 during Wednesday’s Asian session and the dollar remained steady against its major trading partners, with the dollar index hovering around 101.000. The dollar traded at 115.24 against the yen.
Market Ups and Downs
U.S. markets continued to rally on Tuesday, with the Dow rising 114 points, closing slightly below the ‘magic’ 20,000 point. The S&P 500 and the Nasdaq also closed higher. Oil prices failed to ride wave, falling on Wednesday on reports of a rise in U.S. crude inventories and concerns that OPEC produced more oil in November than originally thought. According to the International Energy Agency, OPEC pumped 500,000 barrels per day in November above its official estimate, generating 34.2 million barrels per day. U.S. WTI crude oil futures fell 1.2 percent to trade at $52.29 per barrel, while international Brent crude futures fell 1.3 percent to $55.03 per barrel.