Let the doves sing
SPY•Singapore unexpectedly held policy steady, while traders raised the odds that the Federal Reserve will leave rates unchanged at its Oct. 27-28 meeting to 77%. Markets awaited U.S. September CPI, with analysts forecasting a 0.6% monthly increase and 3.6% annual inflation.
1. Policy outlook shifts
The Monetary Authority of Singapore kept policy on hold, contrary to expectations for a tightening, citing a view that growth and inflation would ease. Traders see a 77% chance the Fed will leave its policy rate unchanged at its Oct. 27-28 meeting, up from 51% a month earlier, and are pricing in about 75 basis points of tightening by late 2027.
2. Inflation and Fed signals
Analysts estimated that U.S. consumer prices rose 0.6% in September from the previous month, compared with 0.4% in August, with annual inflation accelerating to 3.6% from 3.4%. The Fed was also due to publish its Beige Book. New York Fed President John Williams said he still sees one more rate hike this year but downplayed the need for another in 2027.
3. Other market developments
Oil prices climbed in Asian trading after further Houthi attacks on Saudi Arabia, while China’s September export growth topped market forecasts. In early European trade, Euro Stoxx 50 futures rose 0.36%, German DAX futures gained 0.38% and FTSE futures edged up 0.07%; S&P 500 futures were up 0.22%.
