Oil slips, Asia stocks dip ahead of Fed, BOJ

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Oil traded near seven-week lows on Tuesday as a softening demand outlook weighed on commodities, while bond, currency and stock markets traded cautiously...

A man walks past a monitor displaying the Topix share average, Nikkei share average and the Japanese yen exchange rate against the U.S. dollar, outside a brokerage in TokyoSINGAPORE - Oil traded near seven-week lows on Tuesday as a softening demand outlook weighed on commodities, while bond, currency and stock markets traded cautiously ahead of central bank meetings in the U.S. and Japan and a slew of major corporate earnings reports.

Markets are pricing almost no chance of a U.S. rate cut this week but have fully priced a 25 basis-point reduction in the Fed Funds rate for September and so expect policymakers to sound dovish. The dollar and yen were kept in fairly compact ranges and took a breather after recent breakout moves. "It is too early to tell if the factors driving yen weakness have changed permanently. For now, this seems more like a short-term correction to the USD/JPY higher trend, but we feel there is downside risk that needs to be priced into a trade."

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