Stocks buoyed by trade hopes, bond yields up with European Central Bank on deck

In A Fracturing World Central Banks Stuck Together In Zero Sum Battle

In A Fracturing World Central Banks Stuck Together In Zero Sum Battle

U.S. Treasury yields rose for a third day, tracking those in the euro zone bond market, as investors were unsure about the stimulus measures the ECB will employ, with a report late on Tuesday that the central bank may delay quantitative easing adding to the uncertainty.

If the Fed and ECB do as expected at their upcoming meetings, BOJ officials will be torn between how a stressed financial system may respond to ever lower rates, and how Japanese exporters may be damaged if the yen rises in value as a result of the actions of those other central banks.

The ECB meets this Thursday, and European officials noted their place in the queue as they contemplate pushing the euro area's target interest rate deeper into negative territory.

Germany's DAX rose after Finance Minister Olaf Scholz said the country was ready to inject "many, many billions of euros" into the economy to counter any economic downturn.

His comments, at the start of the country's 2020 budget debate, come after Reuters reported Berlin was looking into creating a "shadow budget" to boost public investment and effectively circumvent limits set by its national debt rules.

The Fed's latest policy meeting concludes next week, on Wednesday, Sept. 18, when the USA central bank is expected to reduce interest rates again by a quarter of a percentage point.

The sell-off in fixed income markets failed to lift global stocks, where the mood was subdued amid concerns over the health of the world economy.

Asian bourses slipped lower after data showed China's mainland factory-gate prices shrank at their fastest pace in three years as flagging demand at home and overseas forced some businesses to slash prices.

The euro held steady at $1.1013 but traded near a one-week low.

The pan-European STOXX 600 index .STOXX rose 0.10%, while MSCI's gauge of stocks across the globe .MIWD00000PUS was flat after falling as much as 0.54% during the session.

At the US Federal Reserve policymakers are split over whether to cut a lot a little or not at all
At the US Federal Reserve policymakers are split over whether to cut a lot a little or not at all

"While the enormous slide in China factory gate prices reminded us of what we already know, United States tariffs are sinking the Chinese economy and at a much quicker pace than anyone could have imagined".

The export-heavy German index was also aided by a Reuters report that Bank of Japan policymakers are more open to discussing the possibility of expanding stimulus at their September 18-19 board meeting due to the broadening fallout of the U.S.

On Wall Street, stocks were lower, weighed down in part by technology .SPLRCT shares as data from China showing producer prices had their sharpest pace of declines in three years in August renewed global recession worries.

Benchmark U.S. 10-year notes US10YT=RR last fell 1 point in price to yield 1.7333%, from 1.622% late on Monday.

The US dollar briefly rose to a six-week high of 108.04 yen before paring gains slightly to trade up 0.12 per cent at 107.36 yen.

U.S. stock futures rose 0.57 per cent in Asia today after the S&P 500 ended 0.72 per cent higher in NY yesterday.

Sterling was last trading at $1.2342, down 0.02% on the day.

US crude traded at $57.97 a barrel after hitting the highest since July 31.

USA crude traded at $58.43 a barrel after hitting the highest since July 31. Saudi Arabia is OPEC's de facto leader.