Stock futures slip as investors await Fed minutes
U.S. stock index futures dipped slightly on Wednesday as investors await details of the Federal Reserve’s last meeting for clues on the timing of the next interest rate hike. The Fed will release the minutes of its Jan. 31-Feb. 1 meeting at 2:00 p.m. ET (1900 GMT), which could offer clues on whether the central bank will raise rates in March. Policymakers, including Fed Chair Janet Yellen, have been stoking the possibility of a rate hike sooner than later. But traders have priced in slim chances of a move until June, even with the backdrop of strong economic data. The odds for a hike in March are 22 percent, increase to 47 percent for May, and stand at 69 percent for a move in June, according to Thomson Reuters data. Also on investors’ minds is how the Fed views uncertainty regarding economic policy under President Donald Trump. Trump’s promises of tax and regulatory reforms and fiscal stimulus have boosted investors’ confidence, helping send Wall Street to record highs. But, the rally has inched along in recent days as investors await more clarity on his plans.
German Two-Year Yields Fall to Record as Haven Demand Persists
German two-year notes climbed for a fourth day, pushing the yield to a record low, as investors sought the region’s safest assets amid growing concern over the outcome of the French presidential election. The yield spread between the securities and similar-maturity Treasuries touched the widest in almost 17 years as the latest polls showed anti-euro candidate Marine Le Pen narrowing the gap against a second-round competitor. “People are just afraid to fade the move,” said Alexander Aldinger, an interest-rate strategist at Bayerische Landesbank in Munich. “If we can see some stabilization in political news we will stop at current levels and I can’t see that we’ll reach minus one percent.” The yield on German two-year notes dropped as much as five basis points to a record minus 0.915 percent. That pushed the spread versus similar-maturity Treasuries to 213 basis points, the most on a closing basis since March 2000.
China’s regulators to create asset management supervisory framework
China’s central bank and other financial regulatory bodies are creating a universal framework for the oversight of the asset management industry, Chen Wenhui, the vice chairman of the country’s insurance regulator, told a news conference. Reuters reported earlier on Wednesday China’s financial regulators had circulated a draft framework of new rules aimed at curbing risks and reducing leverage in the booming asset management industry.