US Futures Rise Ahead of Fed in a Wary Mood – Europe Market Wrap

US equities futures rose slightly as a cautious tone persisted throughout global markets ahead of the Fed’s interest-rate announcement.

Traders are split on whether the US central bank will announce a 25 or 50 basis point decrease later Wednesday, with market-implied odds currently indicating a 55% possibility of the larger move.

Contracts on the S&P 500 rose less than 0.2%, with the benchmark down approximately 0.5% from its July peak. Europe’s Stoxx 600 index fell. The Dollar fell near its lowest level since January, while Treasury yields edged higher.

Investors expect the Fed to loosen policy enough to respond to recent signals of economic weakness, without raising concerns that circumstances are worse than markets believe.

In the UK, money markets expect the BoE to ease slightly less after services inflation increased to 5.6% in August from 5.2% in July, while the headline figure remained just above the 2% target. The Pound surged, as UK government bond yields jumped following Wednesday’s statistics.