Here's the forecasting rundown for stocks, bonds, currencies, emerging markets and commodities.

(Bloomberg) — U.S. stocks slipped in light trading, while Treasuries edged higher three days before the Federal Reserve’s policy decision. Emerging-market assets gained as traders held to bets the central bank will stand pat amid financial-market volatility.

The Standard & Poor’s 500 Index retreated in trading 21 percent below the 30-day average. Equities in developing nations rose for the first time in three days. Treasuries edged higher, while the dollar fluctuated. Copper declined for a second day on concern slowing growth in China will hurt demand. 

Traders are predicting there’s a 26 percent chance that the Fed will raise borrowing costs at its Sept. 16-17 meeting, down from more than 50 percent before China’s currency devaluation roiled financial markets and raised concern about global growth. The yield on 10-year Treasuries held in a five-basis-points range, while the S&P 500 pivoted near 1,950 and emerging-market assets recouped some of the deep losses they’ve endured in the past month.

“That’s kind-of indicative of a bearish bias and sideline-sitting by a lot of investors,” said Walter “Bucky” Hellwig, who helps manage $17 billion as a senior vice president at BB&T Wealth Management in Birmingham, Alabama. “There’s just not an impetus to make a big bet here in front of the Fed meeting.”

Stocks

The S&P 500 fell 0.4 percent at 4 p.m. in New York. The index jumped 2.1 percent last week, the most since July. Trading in American equities was light amid a two-day Jewish holiday.

“The market is in a wait-and-see mode,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp. “Unless we get a major, major move in oil or the dollar or China pulls a crazy stunt, I think we’ll be like this until Thursday.”

The Stoxx Europe 600 Index slipped 0.6 percent after fluctuating in a wide range. While the gauge fell 14 percent from its record in April through last week’s close, strategists remain confident the index will rebound and post its best year since 2009.

They forecast the gauge will climb about 18 percent in 2015, outperforming U.S. equities and recovering all ground lost after China devalued the yuan in August. The S&P 500 will rise 12 percent from the last close through December, according to projections.

 

Bonds

The yield on 10-year Treasuries fell one basis point to 2.18 percent. The bond market suggests policy makers will wait to raise rates, while economists are almost equally divided. The yield has moved between 2.17 and 2.22 for the past five sessions.

With odds this low, if the Fed were to move it would have a “major impact” on markets, according toPhilip Marey, a senior market economist at Rabobank Groep in Utrecht, the Netherlands.

In Europe, more economists are now forecasting the European Central Bank will expand its stimulus program to support a faltering economy, though bond investors have yet to be convinced with government bonds in the area little changed today.

Currencies

The dollar declined a second day versus the yen as traders doubted the Fed will raise rates this week, with a gauge of the greenback reaching a two-week low.

The yen increased 0.4 percent to 120.16 per dollar. Japan also reviews monetary policy this week. With the country’s economy struggling to gather momentum, 11 of 35 economists surveyed by Bloomberg see the central bank stepping up easing measures in October, while two are forecasting a move as soon as Tuesday.

Yuan positions at China’s central bank and financial institutions fell by the most on record in August, a sign that policy makers stepped up intervention to support the currency.

Turkey’s lira declined to a record following its longest stretch of weekly declines since 1999.

Emerging markets

The MSCI Emerging Markets Index advanced 0.8 percent as traders predicted the Fed won’t tighten, shoring up demand for riskier assets whose valuations tumbled in the past month amid growing signs China’s economy is slowing. Equity benchmarks in Russia, India and Malaysia climbed at least 0.8 percent.

“The market is not positioned for the Fed to raise rates,” said Aurelija Augulyte, a senior strategist at Nordea Bank AB in Copenhagen, who favors commodity currencies like the Brazilian real and South African rand after they “overshot” their fair values. “The Fed is not in a rush and even if they do hike, which they might, they will talk down the rate path, and maintain the gradualist tone, which should be emerging-market positive.”

China’s authorities are faced with a juggling act that’s getting more complex by the month, as they seek to cushion the economic slowdown, support the stock market, stabilize the yuan and press on with reforms to give market forces a bigger role in allocating resources.

 

Commodities

Copper and other industrial metals dropped after weak Chinese industrial output and fixed-asset investment bolstered concern that demand growth will stall in the world’s biggest user.

Gold prices are trading near a one-month low, investors are dumping holdings through exchange-traded products, and the metal’s volatility is rebounding.

West Texas Intermediate crude fell 1.4 percent to $44 a barrel. It sank 2.8 percent on Friday, capping a weekly loss of 3.1 percent amid concern over a glut. Brent crude dropped 3.3 percent to $46.54.

– With assistance from Sofia Horta e Costa, Lucy Meakin, Cecile Vannucci, Neil Denslow and Stephen Kirkland in London.

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