Asian equities and European futures rose ahead of the Federal Reserve’s monetary policy decision, where the US central bank is expected to continue to fight inflation and raise interest rates by 0.25 percentage points.
Hong Kong’s Hang Seng index added 1.8 percent, China’s CSI 300 gained 0.3 percent and South Korea’s Kospi rose 1.1 percent. Japan’s Topix rose 1.9 percent, after markets reopened after a one-day break for the vernal equinox holiday.
European futures also pointed higher, with contracts for the Euro Stoxx 50 and FTSE 100 up 0.4 percent and 0.1 percent respectively.
Banking stocks were also pushed higher, with the Hang Seng Finance index and the Topix Banks index up 1.8 percent and 2.4 percent respectively.
Investors are expecting a rate decision from the Fed later today. The futures market showed traders expected a rise of 0.25 percentage points from the current range of 4.5 percent to 4.75 percent.
Expectations to increase interest rates have declined in recent weeks, as traders bet that the turmoil in the banking sector triggered by the collapse of Silicon Valley Bank and UBS’s takeover of rival Credit Suisse will force the Fed to ease off its tightening cycle.
The market now expects the rate to peak below 5 percent in June and end the year at 4.38 percent.
The Bank of England also met on Thursday. Prices from the swap market show investors are divided between an increase of 0.25 percent and no change.
Efforts to prevent contagion in the financial system, including a suggestion by US Treasury secretary Janet Yellen that the government could withdraw all deposits at smaller sovereign lenders, helped calm nerves on Tuesday.
The blue-chip S&P 500 index added 1.3 percent and the tech-heavy Nasdaq Composite rose 1.6 percent.
The dollar averaged against a basket of other currencies on Wednesday, close to five weeks ahead of the Fed’s decision.
US Treasuries made small gains, with the yield on the two-year note, which is sensitive to interest rate expectations, falling 0.01 percentage point to 4.16 percent.
The yield on the 10-year note fell 0.01 percentage point to 3.60 percent. Yields move inversely to price.
Oil prices fell, with West Texas Intermediate, the US benchmark, down 0.5 percent to trade at $69.33 a barrel, paring its two-day advance of nearly 4 percent. Brent crude, the international benchmark, lost 0.4 percent to $75.02.