Global Stocks Rally Stalls as Investors Eye Fed, BOJ, Apple

World stocks fell and the dollar weakened on Tuesday, as investors locked in gains from the past month before a Federal Reserve policy meeting and results from Apple.

Wall Street was set for third subdued start in a row as interest in what Apple would say about global demand almost matched speculation about Fed signals on U.S. interest rates after a two-day meeting that starts later on Tuesday.

European shares fell 0.5 percent following a profit warning from BASF. The world’s largest chemicals firm blamed struggling emerging markets like China and Brazil.

Tokyo’s Nikkei tumbled overnight too, after the yen gained. Chinese markets dove 2 percent, then recovered, in another volatile session after last week’s surprise PBOC rate cut.

The euro was little changed at $1.1050 after the European Central Bank’s chief economist said there were “no taboos” as it seeks ways to push up inflation.

“We are in a situation where the time-frame for achieving the inflation objective risks once again to be moved back,” the ECB’s Peter Praet said. “The Governing Council has given a very strong message: it is ready to draw the consequences of its assessment of the monetary policy stance.”

The most pressing topic for traders remained the Fed meeting that ends on Wednesday. Markets are pricing in only around a 7 percent chance the U.S. central bank will raise rates this week, but they will be watching for signals that it might act at its next meeting, in December.


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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.