FOMC Preview (It’s Not Just About a Rate Hike)

What’s in Today’s Report:

• FOMC Preview (It’s Not Just About a Rate Hike)

Futures are extending Monday’s losses and are modestly lower as there were no positive headlines in the Mid-East and oil (and yields) rallied further as a result.

Brent crude is up another 1% as there was no improvement in the trifecta of concerns in the Mid-East: Hormuz traffic, Houthis seizing Yemeni coast and the continued shutdown of the Saudi East-West pipeline.

Economic data was mixed as UK unemployment slightly beat while the German ZEW Biz Expectations missed.

Today focus will remain on the Mid-East and any positive headlines (even just in tone) should pressure oil and yields and help stocks lift. However, if there are more negative headlines, expect the opposite: Higher oil, higher yields and even lower stocks.  Outside of geopolitics, we do get the first look at September economic activity via Empire Manufacturing (14.1) and the more Goldilocks the number (solid headline but stable or declining price indices) the better for markets.