By Paul J. Davies 

Investors were looking ahead to the U.S. interest-rate decision later on Wednesday, with stocks set to open slightly higher after a very quiet morning in Europe and Asia where many markets were closed for the May Day holiday.

U.S. equity futures pointed to opening rises of 0.3% for both the S&P 500 and the Dow Jones Industrial Average, but Apple was trading up nearly 6% in premarket trading following news that the maker of the iPhone plans to return more cash to shareholders.

Treasury yields slid marginally ahead of a Federal Reserve press conference that is expected to confirm a watch-and-wait stance toward inflation.

Stock markets in Japan, China, Korea and across most of mainland Europe were shut, but with Danish and U.K. stocks trading, The Stoxx Europe 600 was flat and the FTSE 100 was down 0.1%.

There was some limited, slightly positive economic data from South Korean, where exports sank for a fifth straight month in April but by less than expected. Exports fell 2% compared with the same month last year, according to preliminary data from the trade ministry. That was less severe than the market forecast of a 5.6% fall.

"The improvement was broad-based across key sectors, and the improvement of auto and shipbuilding is notable," wrote Marie Kim and Jeeho Yoon at Citigroup. "However, exports of semiconductor continued to be weak reflecting lethargic recovery of the unit price."

Elsewhere, U.K. house price growth remained weak with April data lifting the annual rate to 0.9% from 0.7% recorded in March. That was better than the consensus forecast for no rise in the rate of growth.

But this anemic performance came despite increased risk-taking by lenders. Mortgage rates have fallen for borrowers taking out very large loans, helpful for first-time buyers, and lenders are offering longer-term mortgages to make monthly repayment rates more affordable, according to Pantheon Macro Economics.

The Bank of England is due to publish its latest inflation report and rate decision on Thursday and could be the one major central bank to maintain a bias toward tighter policy. "November remains the most likely timing for the next hike in rates," said Paul Hollingsworth, U.K. economist at BNP Paribas. "Even a modest amount of tightening would see the Bank of England stick out like a sore thumb against a backdrop of an easing bias elsewhere."

Yields on 10-year Treasurys, which rise when prices fall, were at 2.496% from 2.501% Tuesday, after President Trump once more took to Twitter to complain that the Fed had "incessantly lifted rates, even though inflation is very low." The Fed last raised rates four months ago and in January signaled a U-turn on its policy of cutting its balance sheet and pushing through rate rises.

German 10-year bund yields returned to positive territory Tuesday and rose again to 0.012% Wednesday, while gilt yields in the U.K. were flat at 1.158%.

The dollar extended several days of relative weakness following last week's rally with the WSJ Dollar Index down 0.11%.

In commodities, Brent crude oil rose by 0.1% to $72.13 a barrel, while gold slipped 0.1% to $1.284.30 an ounce.

Write to Paul J. Davies at paul.davies@wsj.com

 

(END) Dow Jones Newswires

May 01, 2019 07:29 ET (11:29 GMT)

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