Oil prices hit 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.
Brent crude futures touched $79.36 as traders focused on worries over Chinese demand rather than tensions in the Middle East or Venezuela, and turned sellers.

Copper and iron ore prices fell, and zinc and aluminium slipped to multi-month lows, while there was little by way of support from China’s Politburo, which at its July meeting announced no new detailed efforts to boost the economy.
The S&P 500 has steadied, opens new tab after a two-week downturn and futures were flat late in the Asia session.
European futures edged 0.1% higher, with moves kept small by the two-day policy meetings in Washington and Tokyo that loom over markets and wrap up on Wednesday.

Japan’s Nikkei, opens new tab, which dropped nearly 6% last week, was 0.1% lower in afternoon trade. MSCI’s broadest index of Asia-Pacific shares outside Japan, opens new tab fell 0.4%.
A couple of individual stock moves were eye-catching, with a discounted block-sale dragging iron ore miner Fortescue, opens new tab down more than 9% in Australia. Shares of Standard Chartered rose 5% in Hong Kong after the lender lifted its earnings outlook and announced a $1.5 billion share buyback plan.

All eyes were on interest rates. Japanese government bond yields edged lower with the 10-year JGB yield down 2.5 basis points at 1%. Ten-year U.S. Treasury yields were steady at 4.186%.
“The term ‘calm before the storm’ has been heard across the floors,” said Chris Weston, head of research at Pepperstone in Melbourne. “This is a day for position management and to review broad exposures.”
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.

SOURCE: REUTERS