World stock indexes climbed and the US dollar weakened yesterday on expectations the US Federal Reserve will leave interest rates unchanged after its policymakers meet this week, while oil prices surged from multi-week lows.

US Treasuries yields dipped as traders booked profit ahead of this week’s policymaking meetings at both the Fed and the Bank of Japan. Weak recent US data has boosted bets that the Fed will skip the chance to raise rates at this meeting.

In Japan, policymakers could well go in the opposite direction by easing policy, though conflicting reports on what the central bank might do have stoked uncertainty.

Sources have said the BoJ will consider making negative interest rates the centrepiece of future policy easing by shifting its prime policy target away from base money. Both central bank meetings are scheduled for today and tomorrow.

“The market is resigned to believing that the Fed is not going to raise rates this week,” said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.

The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.38 per cent at 95.744 after hitting a 15-day high of 96.108 on Friday.

Benchmark 10-year Treasury notes were up 4/32 in price for a yield of 1.687 per cent, down 0.5 basis point from late on Friday.

Oil prices rose about two per cent after Venezuela said Opec and non-Opec producers were close to a deal to stabilise the market.

Brent crude futures were up 1.8 per cent at $46.57 a barrel and US crude was up 1.9 per cent at $43.83. Last week, Brent hit a two-week low and US crude fell to a five-week low.

A firmer oil price bolstered energy company shares on bourses around the world, but the benchmark S&P 500 index pared early gains and was last trading only slightly higher.

“People will want the uncertainty of the Fed meeting out of the way,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “People will start re-engaging once the uncertainty has passed.”

The S&P energy index was up 0.4 per cent, while the rate-sensitive S&P financial index was up0.6 per cent. The Dow Jones industrial average was up 31.43 points, or 0.17 per cent, at 18,155.23, the S&P 500 gained 3.69 points, or 0.17 per cent, to 2,142.85 and the Nasdaq Composite dipped 2.67 points, or 0.05 per cent, to 5,241.90.

MSCI’s all-country world stock index was up 0.5 per cent, while European shares closed up one per cent.

Assuming no move on policy at the Fed meeting, the focus will be on the Federal Open Market Committee’s forecasts for the fed funds rate. There was little discernible market reaction to weekend bombings in New York City and New Jersey and a stabbing at a Minnesota shopping mall.

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