European markets cautious as Fed decision and big tech earnings approach

Headlines:

Markets:

• AUD is the strongest performer, while NZD trails.
• The 10-year Treasury yield has moved up 2.5 basis points to 5.017%.
• Gold has slipped 0.3%, trading at $4,045.
• WTI crude has gained 1.9% to $101.78.
• European stocks are roughly flat, with S&P 500 futures up 0.1%.

After the busy stretch in Asian trading, the session has been calmer, with investors pausing and waiting for the week's bigger events.

Earlier, Australian inflation came in above expectations, and the RBNZ caught markets off guard by leaving the overnight cash rate at 2.75%, with the decision passed by a 4-3 vote. Those moves did not carry into the European morning, however, as traders turned their attention to the Fed's policy announcement and major tech earnings later in the day.

The dollar was far more stable, with EUR/USD edging up 0.1% to 1.1130 and moving within an 18-pip range. USD/JPY holds steady at 157.90 on the day.

Oil remains supported after reports that the Houthis attacked a major Saudi refinery and after Washington warned of a possible short escalation in the conflict with Iran once the midterm elections are over. WTI crude is up almost 2% at $101.78.

Elsewhere, risk appetite stayed subdued as the 10-year Treasury yield pushed slightly higher, back above 5%. European shares are softer with only small moves across the region, while US futures are a bit firmer as tech names try to extend Tuesday's gains. Meta and Alphabet are scheduled to report after the closing bell, putting their earnings in focus today.

Gold is also more hesitant, hovering just above the $4,000 level. The metal is down a touch on the day to $4,045, with traders waiting on the bond market's reaction to the Fed decision and the broader risk tone to see whether gold can break lower through that round number.

Later, the UK autumn budget statement is due and should draw attention for the pound and gilts. After that, the Bank of Canada's decision arrives ahead of the Fed announcement, with big tech earnings rounding out the schedule.

There is still a lot to be decided, so today's relatively quiet market tone is unlikely to last; the upcoming risk events could inject volatility into trading, with month-end flows adding to that in the coming days.