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Investment market update

Early Trading

UK stocks are expected to edge higher this morning, with investors seen avoiding strong bets ahead of the US Federal Reserve’s interest rate decision later in the day.

World Markets

Asian stocks joined a global rebound as the Federal Reserve’s decision approached. The region’s stocks gained the most in two months, with Hong Kong’s Hang Seng Index climbing 2% to break its longest losing streak since 1984.

US stocks rose as the S&P 500 capped its first back-to-back gains in more than a month. Energy companies led a rally with crude oil ahead of the expected rate rise from the Federal Reserve, with Chevron Corp. and Exxon Mobil Corp. gaining more than 3.8%, taking their two-day advances to at least 6.8%.

UK stocks rose yesterday for the first time in 8 days helped by advancing shares of almost all FTSE 100 Index companies. J Sainsbury Plc rose 5.2% after retail research firm Kantar Worldpanel said the company “stands out” heading into Christmas. Peer Wm Morrison Supermarkets Plc increased 4.9%. Glencore Plc added 3% after JPMorgan Chase & Co. upgraded the stock to overweight, the equivalent of a buy.

Headlines

Policymakers at the US Federal Reserve will decide on interest rates today amid widespread expectations for the first rise in nearly a decade. Federal Reserve chairwoman Janet Yellen has signalled recently that a rise in US rates is a near certainty this month after America’s central bank surprised markets in September when it voted against a change.

The Bank of England has again expressed concern about the UK’s buy-to-let property market. The Bank’s governor, Mark Carney, said he was concerned about high levels of lending to landlords and that the Bank would take action. ‘There are a number of things happening … we are watching it closely and we will take action,’ he told the FT.

Less than two weeks after the European Central Bank president unveiled a beefed-up stimulus program to push inflation back toward its 2% target, fresh falls in the price of crude may have already undermined his efforts. Analysts at Nomura International Plc and JPMorgan Chase & Co. say Draghi’s December forecast of 1% average inflation in 2016 may be too ambitious.

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