Markets Hold Breath for Fed Rate Decision Amid Global Rally

Global stocks and bonds have rallied as investors await signals from the Federal Reserve on potential rate hikes this month. The U.S. payrolls report on Friday will be a key indicator, following disappointing private labour data for August.

The yen has powered towards its biggest two-day gain since August, while Japanese government bond yields slid from historic peaks in tandem with a recovery in global bonds.

Oil prices have edged lower, but remain near $95 a barrel due to ongoing uncertainty over military strikes between the U.S. and Iran.

Credit markets currently assign a roughly 60% chance of a rate hike from the Fed this month, up from less than 40% a week ago.