US futures inch higher ahead of Fed meeting after Evergrande payment plan soothes some investor nerves
US futuresrose on Wednesday as focus turned to the Federal Reserve's monetary policy decision.
- Chinese stocks fell less than some had feared after embattled developer
Evergrandesaid it would make a coupon payment.
- Evergrande could still trigger further volatility, with an offshore bond payment due on Thursday.
US stock futures edged higher on Wednesday, as investors waited for the Federal Reserve's latest monetary policy decision, and fears about embattled Chinese property developer Evergrande receded.
Evergrande unit Hengda announced it would make a coupon payment and the Chinese central bank pumped a net 90 billion yuan ($13.9 billion) of liquidity into the financial system, limiting the decline in Asian stocks.
The debt crisis enveloping Evergrande, China's second-biggest property developer, has shaken stock
Some have suggested Evergrande's size means a default could send shockwaves through the global economy, although the consensus on Wall Street is that the Chinese government will contain the problem. The People's Bank of China's injection of cash into the banking system helped cool market nerves, analysts said.
However, Evergrande still has an interest payment due on one of its dollar bonds on Thursday, which could trigger more volatility.
Investors had one eye on Evergrande and another on the Fed, which will conclude its two-day monetary policy decision on Wednesday. Analysts said the Fed is likely to signal that it plans to start withdrawing its support for the economy this year, after a period of strong growth and inflation.
"We expect the statement to indicate that a reduction is likely to be appropriate 'this year' as long as the economy remains on track," Deutsche Bank economists, led by Brett Ryan, said in a note.
The key issue for investors is when the Fed will start trimming - or "tapering" - its $120 billion a month of bond purchases. Ryan said he expects the Fed's message to be that "the bar to pushing the announcement beyond November is relatively high."
US bond yields and the dollar were little changed, suggesting investors do not expect any major jolts to come from the Fed meeting.
Elsewhere in markets,
Bitcoin rose 3.61% to $42,405, according to Bloomberg prices. The world's biggest cryptocurrency stood above $47,000 on Monday, but has been hit hard by general risk aversion during the Evergrande crisis.
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