No FOMC Yet But Investors Are Sweating This Morning


 Strong United States (US) job opening data (JOLTS) in September added to the percentage of an aggressive interest rate hike by the Federal Reserve (Fed) early tomorrow morning.

It is understood that labor demand remains strong in the US and flanked by the PMI reading from the ISM survey which exceeded projections although it fell from the previous month was enough to maintain the dollar's dominance.

The streak saw equity markets decline for the 2nd session with the Dow Jones Industrial down 0.24% at 32,653.2 while the S&P 500 lost 0.41% at 3,856.1 and the Nasdaq Composite fell 0.89% at 10,890.85.

Europe's STOXX 600 index rose 0.58% and MSCI's gauge of global shares rose 0.19%.

The Asian situation this morning saw Japan's Nikkei 225 fall 0.11% while the Topix rose 0.11% while South Korea's Kospi lost 0.19% and the Kosdaq fell 0.58%.

Australia's S&P/ASX 200 index rose 0.15% from a decline after yesterday's rate hike by the Reserve Bank of Australia (RBA) and MSCI's broadest gauge of Asia Pacific shares outside Japan was flat.

Back to the Fed, the FOMC meeting that will take place today in the New York session until tomorrow and will see the implementation of an interest rate increase of 75 basis points.

Previously, investors bet the central bank to be less aggressive with their rate implementation of 50 basis points as economic data indicated weak growth.

However, the latest reading yesterday restored the possibility of aggressive rates with the expectation that the economy will be able to cover the impact.

Commenting Anthony Saglimbene of Ameriprise Financial, the market expects a weak labor reading as the decline in employment will reduce demand and could help lower inflation.

In the meantime, the dollar index is seen to be still strong but showed slight signs of decline this morning with the 10-year Treasury note yield falling 2.7 points at 4.05% while the 2-year note rose 4.4 price points at 4.5447% yield.