Global stocks advance ahead of Fed decision; Treasuries steady

Bloomberg

Global stocks advanced as Congress moved towards agreement on a spending package that would boost the economy. Treasuries were flat ahead of the Federal Reserve’s policy decision.
Gains across markets were modest but broad-based, with the Stoxx 600 Index notching a third day of gains. The pound strengthened as Brexit negotiators worked to strike a trade agreement before the end of the year.
Investors have reacted positively this week to news about a US stimulus package, with Senate Majority Leader Mitch McConnell saying he will keep lawmakers in Washington until a deal gets done. The 10-year Treasury yield remained just above 0.9% amid speculation that the Federal Reserve will either offer guidance on or adjust its bond-buying program.
Elsewhere, the dollar steadied after Tuesday’s decline and oil slipped. US equity futures were slightly higher.
Investors are growing increasingly confident that Democratic and Republican lawmakers will clinch a bill based on a $748 billion bipartisan proposal that would inject cash directly into the economy as prior benefits begin to expire at the end of the year. Meanwhile, traders are eyeing whether the Fed alters its bond purchase program or keeps the status quo.
“There’s a very good chance of a cyclical recovery,” George Bory, fixed income specialist at Wells Fargo Asset Management, said on Bloomberg TV. “Your best bet right now is that the Fed basically just extends out some of that forward guidance and tries to preserve as much optionality as possible.”
The Bank of England and central banks in Mexico, Switzerland and Indonesia are expected to announce policy decisions on Thursday.
Meanwhile, futures on the S&P 500 Index increased 0.1% as of 8:11 am London time and the Stoxx Europe 600 Index climbed 0.7%.
While the MSCI Asia Pacific Index increased 0.8%, the MSCI Emerging Market Index gained 0.7%.
The Bloomberg Dollar Spot Index was little changed at 1,125.47 and the euro gained 0.1% to $1.2165.
While the British pound advanced 0.2% to $1.349, the Japanese yen strengthened 0.2% to 103.41 per dollar.
The yield on 10-year Treasuries gained less than one basis point to 0.91% and the yield on two-year Treasuries gained less than one basis point to 0.12%.
While Germany’s 10-year yield increased less than one basis point to -0.61%, Britain’s 10-year yield climbed two basis points to 0.278%.
West Texas Intermediate crude was little changed at $47.58 a barrel and gold strengthened 0.1% to $1,855.35 an ounce.