Morning Bid: Finally, the Fed

Morning Bid: Finally, the Fed

A look at the day ahead in European and global markets from Rocky Swift

After weeks of market gyration and agonising over every speck of U.S. data, the day is finally upon us when the Federal Reserve delivers its appraisal of how much stimulus the world's biggest economy needs to keep humming along.

Markets have priced in a near certainty the Fed will cut its key interest rate by a quarter of a percentage point to the 4.00%-4.25% range today. But they also anticipate the U.S. central bank will go further with nearly 150 basis points of easing through the end of next year.

So all eyes will be on Fed Chair Jerome Powell's comments as well as the central bank's "dot plot" of economic projections, all due after markets close in the United States.

Expectations of a dovish take from the Fed, fuelled also by threats from President Donald Trump, have driven global shares and gold to unprecedented highs at the cost of U.S. Treasuries and the dollar, languishing at a four-year low against the euro.

The Fed deck isn't stacked quite as Trump had hoped. Stephen Miran, head of the White House's Council of Economic Advisers, was sworn into his Fed position on Tuesday morning, while an appeals court separately declined to let Trump fire Fed Governor Lisa Cook.

The president will take in the Fed's decision from London, where he arrived late on Tuesday to seal investment deals and bask in the royal glow of King Charles at Windsor Castle.

Also on the docket is the Bank of Canada, which is expected to cut rates as trade frictions roil labour markets on both sides of the American border.

Meanwhile, data from Japan showed a fourth consecutive monthly decline in exports in August, highlighting the toll on major economies from the wide-ranging tariffs imposed by the Trump administration.

In Asian markets, stocks started out subdued before turning up, led higher by Hong Kong's Hang Seng Index, which surged 1.4%. Equity futures indicated positive openings in Europe, while U.S. stock futures were flat.

Key developments that could influence markets on Wednesday:

- Fed, Bank of Canada policy meetings

- U.S. housing starts for August

- British consumer price index (CPI) for August

- Euro zone consumer price data for August, final

- Germany's reopening of 23-year and 31-year government debt auctions

- Meta opens its annual Connect conference at its Menlo Park, California-based headquarters

- StubHub, WaterBridge Infrastructure go public in New York

(Rocky Swift in Tokyo; Editing by Jacqueline Wong)