| LONDON, March 19
LONDON, March 19 The world's major stock,
currency and bond markets steadied on Wednesday as investors
focused more on an upcoming U.S. Federal Reserve policy decision
than the continuing military tensions between Ukraine and
The U.S. central bank is expected to trim its bond-buying
stimulus by $10 billion a month for a third time in a row later
on Wednesday, as well as update its guidance on when interest
rates will eventually rise.
The policy of steadily scaling back stimulus, while likely
noting the economy's recent weakness is not solely down to harsh
winter weather, should soothe any concerns investors might have
had surrounding new Fed Chair Janet Yellen's first
This shift in focus towards the Fed away from geopolitical
concerns over Russia and Ukraine put a floor under stocks, which
had opened lower following a strong start to the week.
It kept U.S. Treasuries and the dollar largely unchanged on
the day within narrow ranges.
"European equities are taking a breather following strong
gains earlier in the week," wrote Barclays strategists in a note
to clients on Wednesday.
"Markets responded positively to the reassurance from
Russian President Vladimir Putin that Russia does not need
further division of Ukraine. More serious economic sanctions are
possible but will take longer to get set up, so risk assets are
not entirely out of the woods," they added.
Early on Wednesday, pro-Russian units took control of a
naval base in Ukraine, in the clearest sign so far that Russian
soldiers had begun to take control of Ukrainian military
facilities across the Black Sea peninsula.
Ukraine's acting Defence Minister Ihor Tenyukh said in
response that his forces would not withdraw from Crimea.
British Prime Minister David Cameron raised the
international stakes, telling parliament that Western allies
should discuss whether to expel Russia permanently from the G8
group of nations if Moscow takes further steps on Ukraine.
By 1200 GMT, the FTSE Eurofirst index of the leading 300
European stocks was up 0.2 percent at 1,309 points.
Germany's DAX was up 0.7 percent at 9,308 points,
boosted by a 7 percent surge in shares of BMW -
Europe's biggest gainer - after the automaker said it expects
profits to rise this year.
Britain's FTSE 100 was down 0.1 percent at 6,599
In currencies, the dollar index, a measure of the
greenback's value against a basket of six major currencies, was
flat at 79.419.
The dollar was up about 0.1 percent on the day at 101.50 yen
, the Japanese currency showing little reaction to Japan's
larger-than-expected trade deficit.
The euro was little changed around $1.3930, unable to
scale last week's 2-1/2-year high of $1.3967, and was down
almost half a percent against sterling at 83.61 pence.
It's a busy day for UK-focused traders and investors, with
British finance minister George Osborne announcing a
pre-election budget that is likely to offer some tax relief to
voters but will stick closely to his tough decade-long plan to
fix the public finances.
The British jobs market showed signs of improving further in
February and the latest Bank of England minutes said
policymakers believe the economy continues to recover, both
pointing to interest rates potentially rising earlier than had
"The combination of BoE minutes and labour market data are
generally favourable for the pound," said Citi strategist
In metals, profit-taking continued to push gold
lower. It was last down 0.7 percent at $1,346 an ounce, slipping
further back from a six-month high of $1,391.76 hit on Monday.
Underlying worries over China's financial and property
sectors bubbled to the surface, weighing on Asian markets.
Chinese stocks dipped and the yuan fell to its
weakest level in a year through 6.20 per dollar, the
first time it has traded more than 1 percent beyond the midpoint
set by the central bank after the daily trading band was widened
to 2 percent.
(Reporting by Jamie McGeever; Editing by Sophie Hares)