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Treasury yields, dollar dip before Fed meeting; oil gains on OPEC cuts

➤ Federal Reserve's two-day policy meeting kicks off.

➤ U.K. Commons speaker bars third vote on PM's Brexit deal.

➤ Wall Street set to open higher; global stocks mixed.

➤ Oil rises as OPEC maintains output cuts until June.

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U.S. equities looked set to extend gains this morning amid mixed trading in Europe and Asia, while the dollar weakened against major peers ahead of the Federal Reserve's two-day monetary policy meeting.

With the Fed widely expected to hold rates at the end of the meeting tomorrow, markets will be watching policymakers' rate projections contained in the so-called dot plot.

"Rather than signaling two rate rises this year and one in 2020, we think [the Fed] will opt for just one hike in 2019 with one more in 2020," wrote James Knightley, chief international economist at ING, in a note.

The Fed's $4 trillion balance sheet will also be in focus as the central bank weighs the timing of ending its balance sheet runoff and what kinds of assets its multitrillion-dollar portfolio will consist of going forward. Fed officials have signaled they will wrap up asset redemptions later this year.

Yields on 10-year U.S. Treasurys fell nearly 2 basis points to 2.59% at 6:30 a.m. ET, while the dollar index, which tracks the U.S. currency's performance against a basket of majors, dipped 0.15% ahead of the Fed meeting. The euro rose 0.11% against the dollar, while the Japanese yen rose 0.19% before the release of the Bank of Japan's latest policy meeting minutes.

Meanwhile, sterling advanced 0.19% against the dollar in the wake of U.K. House of Commons Speaker John Bercow's decision to block another vote on Prime Minister Theresa May's Brexit deal, saying a third vote would not take place unless substantial changes to the pact were made.

May's withdrawal agreement was expected to get another chance to be approved by lawmakers after they agreed to postpone the March 29 Brexit date until June 30, as long as a withdrawal deal could be passed by March 20. But with the latest development, European Union leaders now appear "less likely" to grant a short-term extension when they meet Thursday, said Michael Hewson, chief market analyst at CMC Markets UK.

In equities, the S&P 500 index rose 0.37% overnight, lifted by energy stocks, while the tech-heavy Nasdaq Composite index increased 0.34%. Futures pointed to a gains at the open on Wall Street later.

Asian stocks were mixed, with the Shanghai SE Composite closing down 0.18%, Japan's Nikkei 225 slipping 0.08% and Hong Kong's Hang Seng up 0.19%.

European equities largely traded higher, with the Stoxx 600 index rising 0.52%. The U.K.'s FTSE 100 rose 0.31%, led by gains in miners and retailers as Antofagasta PLC declared a final dividend for 2018 and Ocado Group PLC released a better-than-expected trading update.

Brent crude oil advanced 0.59% to $67.94 per barrel on the ICE Futures Exchange after OPEC and its allies said output cuts will remain in place until at least June, during which they will decide production targets for the second half. Gold gained 0.40% to $1,306.70 per ounce.

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The day ahead:

8:55 a.m. ET — U.S. Redbook

10 a.m. ET — U.S. factory orders

7:50 p.m. ET — Bank of Japan monetary policy meeting minutes