World markets waver before Fed rate call

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Global equities wavered on Wednesday as caution set in before a crucial US interest rate decision, while investors remained alert to developments in the Middle East after the weekend attack on Saudi oil facilities.

Expectations are running high for the US Federal Reserve to deliver the year's second interest rate cut later on Wednesday.

Frankfurt, London and Paris stocks edged upwards after a mixed session in Asia, with dealers braced also for fresh rates guidance from Fed chief Jerome Powell after a key monetary policy meeting.

"Stock markets in Europe are a little higher... as traders look ahead to the Federal Reserve," said CMC Markets analyst David Madden.

"The Fed are tipped to lower rates, but given the US economy is broadly in good health, there is an argument the central bank should hold fire."

The British pound meanwhile slid against the dollar on official data showing weaker UK inflation, but was not far from recent two-month highs struck on hopes that Britain may avoid a no-deal Brexit.

Oil market 'on tenterhooks' 

Elsewhere, oil prices dipped further on Wednesday following news that Riyadh will get its two major installations back online earlier than expected, though analysts said there was nervousness on trading floors about oil security in the future.

The oil market had spiked on Monday in reaction to Saturday's attacks, then tumbled on Tuesday, but still remains at an elevated level according to analysts.

"Last weekend's serious attacks on oil facilities in Saudi Arabia are continuing to keep the oil market on tenterhooks," said Commerzbank analysts in a note to clients.

While the resumption of output from the world's biggest exporter provided some much-needed relief, observers say long-term energy security is now a concern.

"We should not be lulled into a false sense of security. Tensions in the region are still running high and the spectre of a further escalation is hanging over the oil market," noted PVM analysts.

With fears low for now of a military retaliation against Iran - accused of being behind the strikes - focus remains on the Fed, which is expected to cut interest rates while its post-meeting statement will be closely followed for clues about future plans.

The Federal Reserve Bank of New York has this week intervened to keep interest rates in line with the central bank's target, by pumping billions of dollars into financial markets.

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