S&P 500 fluctuates as gains in crude boost energy shares Fed fund futures show rising odds of U.S. rate increase Share on Facebook Share on Twitter The dollar extended its best run of gains in a month, Treasuries fell and U.S. stocks fluctuated as investors speculated the Federal Reserve will reaffirm its intention to raise interest rates this year even as global growth remains tepid. The Standard & Poor’s 500 Index gyrated near its average price for the past 200 days as attention focuses on the Fed’s assessment of the American economy and its ability to withstand tighter monetary policy. European shares slipped a second day. The dollar climbed versus the yen on speculation Japan could lower rates further into negative territory, while the pound weakened amid a lower growth outlook for the U.K. Oil rebounded past $37 a barrel. Economists now anticipate two rate increases this year, with the odds of a hike after today’s meeting near zero, according to Bloomberg surveys. Data Wednesday bolstered the case for tightening this year with inflation creeping toward the Fed’s targets. Investors will focus on clues on the timing of future increases and how Fed Chair Janet Yellen characterizes global growth and the financial-market turmoil that sent stocks to the worst start to a year on record. “There’s a solid consensus that the Fed won’t raise rates today, but we’re looking out to the rest of the year and the markets are doing that, too,� said Anna Rathbun, director of research for CBIZ Inc.’s retirement plan services unit in Cleveland, Ohio. The firm manages about $10 billion. “The market is looking at these inflation numbers and thinking another rate hike is probably due. If Yellen acknowledges global markets and the risks from the outside, investors will feel more comforted.� The Federal Open Market Committee is scheduled to issue its post-meeting statement and updated forecasts at 2 p.m. in Washington. Yellen plans to hold a press conference at 2:30 p.m. Policy makers are expected to reduce the number of rate increases they see this year and leave the target range for the federal funds rate unchanged at 0.25 percent to 0.5 percent. Currencies The Bloomberg Dollar Spot Index added 0.4 percent at 9:48 a.m. New York time, rising for a third straight day in the longest winning streak since Feb. 16. “We are biased toward dollar gains as the market prices a steeper path for rates going forward,� said Adam Cole, head of global foreign-exchange strategy at Royal Bank of Canada in London. We are expecting the Fed to say “that all options are still open -- including the outside possibility of an April hike and that the default position should be a June hike. The implied probability of those two events is still too low in our view.� The yen retreated 0.3 percent to 113.47 per dollar, after strengthening 0.6 percent on Tuesday as the BOJ kept its policy rate at minus 0.1 percent at a review. The pound weakened 0.6 percent to $1.4068 after U.K. Chancellor of the Exchequer George Osborne released a report on the country’s budget that forecast the U.K. economy to grow at 2 percent in 2016, down from a 2.4 estimate in November. Sterling is the worst-performing Group-of-10 currency over the past month amid concern that Britain will vote to quit the European Union at a June 23 referendum, threatening trade and economic stability. Also weighing on the currency is the potential for interest rates to stay lower for longer as the government curbs spending. The Bank of England is scheduled to announce its latest policy decision on Thursday. “We have the budget today, which is expected to be more focused on austerity,� said Petr Krpata, a London-based foreign-exchange strategist at ING Groep NV. “On the surface, this is not good news for sterling when you see soft U.K. data, which are influenced by the uncertainty of ‘Brexit.’� Commodities The Bloomberg Commodity Index, which measures returns on raw materials, rose for the first time in three days as oil futures climbed. West Texas Intermediate crude gained 2.2 percent to $37.13 a barrel, after sliding 5.6 percent in the previous two days as Iran indicated it won’t be joining other major producers in freezing output. U.S. crude inventories increased by 3.2 million barrels last week, according to a Bloomberg survey before government data Wednesday, with a report from the American Petroleum Institute said to indicate an increase of 1.5 million barrels. Total SA Chief Executive Officer Patrick Pouyanne sees the oil market back in balance during 2016, he said in an interview with Le Progres newspaper. Gold for immediate delivery was stable at $1,232.09 an ounce, after posting its first three-day decline in almost a month. Stocks Banks helped drag the Stoxx Europe 600 Index 0.6 percent lower. Credit Suisse Group AG led declines among banks, sliding 6.3 percent, with four Europe-based traders citing the absence of Chief Financial Officer David Mathers from a conference in London as a reason for the drop. Deutsche Bank AG slipped 6 percent after co-Chief Executive Officer John Cryan said the lender may post a loss for the year as it overhauls its business. A gauge of automakers posted the best performance of the 19 industry groups on the equity benchmark as data showed the European car market expanded for a 30th consecutive month in February. Tullow Oil Plc led energy stocks higher, gaining 3.8 percent after finding oil at a well in Kenya. Solvay SA advanced 0.6 percent after the chemical maker said it will divest its stake in a joint venture with Ineos earlier than planned. Standard & Poor’s 500 Index futures fell 0.4 percent. Equities fell in light trading Tuesday as investors awaited the Fed’s policy announcement. Investors will look to economic data including housing starts, inflation and industrial output on Wednesday for signals on likely monetary policy moves. Consumer prices in the U.S. excluding food and fuel in February climbed more than forecast for a second month, adding to signs inflation is moving closer to the Fed’s target. A separate report showed new-home construction in the U.S. rose more than economists forecast during the same period, led by the strongest single-family building in more than eight years. Also in the back of investors’ minds are the results of U.S. presidential candidate contests. On Tuesday, voters in states including Florida boosted the likelihood that Hillary Clinton will be the Democratic Party’s representative in a November election and kept Donald Trump as the front-runner to secure the Republican Party’s nomination. Bonds The yield on two-year U.S. Treasuries was little changed after ending Tuesday at 0.96 percent, the highest close since Jan. 6. The Bloomberg U.S. Treasury Bond Index has dropped 1 percent since the end of February, headed for its first monthly loss of 2016. Anheuser-Busch InBev NV was offering euro-denominated bonds to help pay for the pending $110 billion acquisition of SABMiller Plc. The six-part offering includes notes with maturities ranging from four years to 20 years, according to a person familiar with the information, who asked not to be identified because they aren’t authorized to discuss it. Emerging Markets The MSCI Emerging Markets Index pared losses of as much as 0.4 percent, trading down 0.1 percent. Egyptian shares rose 1.3 percent, extending the longest rally since 2008 after the central bank devalued the pound and indicated it will introduce a more flexible trading policy for its currency. South Africa’s rand fell 1.3 percent to 16.1305 per dollar, declining for a third day to the lowest in almost three weeks as a police probe into the national tax agency was seen as possibly costing Finance Minister Pravin Gordhan his post. President Jacob Zuma reappointed Gordhan in December as finance minister, a post he had held from 2009 to 2014, to help rebuild investor confidence damaged by Zuma’s decision to fire Nhlanhla Nene and replace him with a little-known lawmaker. “It’s a cause for concern,� Rune Hejrskov, who helps manage about $1.3 billion at Jyske Bank AS in Silkeborg, Denmark, said by phone. “Absolutely, we’re pricing South Africa with the possibility that Gordhan may not stay in his job.� A measure of developing-market currencies fell 0.2 percent, retreating for a third day, led by the rand and Indonesia’s rupiah.

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