FISG Daily Market Wrap 16th September

Markets Stabilize Ahead of Fed Decision as Oil Pulls Back From Rally

Asian stocks advanced on Wednesday as investors remained cautious ahead of the Federal Reserve’s interest-rate decision. MSCI’s regional benchmark gained 0.4%, snapping a four-day losing streak, while US equity futures rose 0.2% and European stocks were also set for a firmer open. Treasuries edged higher alongside government bonds in Australia, Japan, and New Zealand, while European bond futures also strengthened. The move followed a sharp global bond selloff driven by higher energy prices and growing expectations of tighter monetary policy. Oil prices pulled back as some investors took profits following a strong rally. Brent crude slipped 0.7% to around $108 a barrel after gaining roughly 20% this month, while signs of rising US stockpiles also contributed to the decline. Despite the pullback, supply concerns remain. Saudi Aramco is delaying oil deliveries to some European customers after attacks on a key pipeline, causing regional crude prices to jump as refiners search for replacement cargoes. The recent oil rally had pushed the US 10-year Treasury yield as high as 5.04% on Tuesday, its highest level in almost two decades, before easing to 4.99% in Asian trading. Markets are pricing a more than 90% chance that the Federal Reserve raises rates later Wednesday, which would mark the first hike since 2023. Investors are also looking ahead to monetary-policy decisions in the UK and Japan later this week, which could reshape expectations for the global policy outlook through the remainder of 2026. In technology, SK Hynix and Intel are reportedly in talks to manufacture memory chips in the US, according to sources. The US-China trade relationship also remained in focus, with prospects for an extension of the trade truce strengthening as both sides discuss reducing tariffs on goods including American energy and agricultural products ahead of next week’s leaders’ summit. Treasury Secretary Scott Bessent said the US deployed only a “nominal” amount in its coordinated intervention to support Japan’s currency and defended the operation as being in US interests. Meanwhile, the New Zealand Superannuation Fund reported a 14.2% return for the year through June, supported by gains across global equity markets despite being underweight in technology stocks that outperformed during the period. Bitcoin remained under pressure near $75,800 after the US Senate blocked a major cryptocurrency market-structure bill. Risk sentiment was otherwise steadier, with investors largely holding back from major positioning ahead of the Fed announcement. A new congressional study also estimated that President Donald Trump’s decision to go to war with Iran has cost US taxpayers $38 billion in direct costs during the first five months of fighting and could push inflation approximately 0.5 percentage points higher by early next year. Overall, markets showed some stabilization ahead of the Federal Reserve’s decision, with Asian equities and government bonds recovering while oil prices pulled back from their recent rally. However, energy-supply disruptions, expectations for tighter monetary policy, and upcoming policy decisions in the UK and Japan remain central to the market outlook. FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.