Tuesday September 15th


U.S.Futures turn positive after data

U.S. stocks were expected to open higher on Tuesday amid data that could shed light on the closely-anticipated U.S. Federal Reserve meeting this week. August industrial production data showed a decline of 0.4 percent, worse than the expected 0.2 percent drop. August retail sales showed an increase of 0.2 percent, missing expectations of a 0.3 percent gain. Ex-autos, retail sales increased 0.1 percent. July retail sales were revised up to 0.7 percent from 0.6 percent. September U.S. Empire Manufacturing showed negative 14.7, versus August's read of negative 14.9. Stock index futures held higher, with the Dow futures up about 40 points, after initially fluctuating between slight gains and losses following the data releases. Treasury yields ticked slightly higher, with the 10-year yield at 2.21 percent and the 2-year yield at 0.75 percent. The dollar turned positive against major world currencies, with the euro dipping below $1.13 and the yen near 120 yen against the greenback. While the data could give markets some direction, major market moves were not expected ahead of the Fed's two-day meeting that kicks off Wednesday. This week's Fed meeting is one of most closely anticipated for some time. While many economists have tilted towards expecting the first Fed rate hike in almost a decade as conditions in the labor market improve, financial markets price in only a small chance of a move. Recent market volatility and concerns about the impact of weakness in China's economy – the second biggest in the world – have tempered market expectations for a near-term rate rise. In Asia, the Bank of Japan held monetary policy steady at the end of a two-day policy and said that slowing demand from emerging markets was hurting Japanese exports. Chinese stocks meanwhile fell more than two percent as concerns about China's economic outlook continued to take a toll. Nikkei gains 0.3%. Japan's Nikkei 225 share average narrowed gains after the Bank of Japan (BOJ) maintained its expansionary monetary policy at an annual pace of 80 trillion yen, as widely expected, in an 8-1 vote. European stock markets traded mixed, while oil prices recovered some of the previous session's sharp falls. Oil edged higher on Tuesday, supported by the prospect of lower U.S. inventories and production although concern about weaker Asian demand kept prices in check. Brent crude was up 23 cents at $46.60 a barrel at 8:51 a.m. EDT, after declining in the previous two sessions. U.S. crude was trading 37 cents higher at $44.37. Gold eased back towards last week's one-month low on Tuesday, with caution ahead of this week's Federal Reserve announcement on interest rates keeping buyers on the sidelines. Speculation that a rate rise could come as early as this month has helped knock gold down 6 percent this year, but turbulence in the wider markets and fears of a slowdown in China have called the timing of the move into question. Spot gold was down more than 0.24 percent at $1,105.70 an ounce, while U.S. gold futures for December delivery were down $2.80 an ounce at $1,104.90. On Friday, spot prices fell to a one-month low of $1,098.35.