GLOBAL MARKETS – Asian stocks pull back as investors wait for FOMC results

GLOBAL MARKETS - Asian stocks follow Wall Street higher ahead of Fed meeting

* Investors are watching for signs of faster policy normalization

* The Fed should post more optimistic forecasts, but no policy changes are expected

* BOE and BOJ policy decisions are also due this week

TOKYO / NEW YORK, March 17 (Reuters) – Asian stocks fell on Wednesday, according to Wall Street, as investors waited to see if the U.S. Federal Reserve will signal a faster path to policy normalization than previously expected.

The US central bank’s Federal Open Market Committee (FOMC) will close a two-day meeting later today.

A regional equity index excluding Japan fell 0.3%, led by declines in the Kospi in South Korea and the S & P / ASX 200 in Australia.

The Shanghai Composite Index slipped 0.4% and the Hong Kong Hang Seng fell 0.2%.

Japan’s Nikkei 225 resisted the trend to add 0.1%, but the larger Topix index was flat or slightly lower.

Global markets have been rocked in recent weeks by a T-bill rout that saw the benchmark yield climb to more than a year as bond investors bet the acceleration of COVID-19 vaccinations and a stimulus massive fiscal stimulus would spur faster-than-expected inflation growth in the world’s largest economy.

Volatility has fueled speculation that the Fed may be forced into a technical adjustment of the levers controlling its key rate, but few expect the central bank to act on the issue at this week’s meeting, even if it does. publishes more optimistic growth forecasts.

“We expect (President Jerome) Powell to note that the FOMC has the tools to intervene if the bond market becomes messy or hinders economic recovery,” analysts at the Commonwealth Bank of Australia wrote.

“But we expect Powell to push back discussions on tightening policies due to the severe weakness in the labor market.”

“US bond yields and the US dollar could rise if the FOMC’s post-meeting statement and Powell’s statement are not seen as dovish enough.”

Yields on benchmark 10-year Treasuries continued to consolidate around 1.6% to 1.6197% on Wednesday in Asia. They reached 1.6420% on Friday for the first time since February last year.

An index that tracks the dollar against six major peers standing at around 91.90 after retreating from a three-month high of 92.506, hit last week.

Currency market cautiousness could extend through the week, with the Bank of England announcing its policy decision on Thursday and the Bank of Japan concluding a policy review on Friday in which it could phase out a numerical target for its purchases of active.

On Tuesday, the Dow Jones Industrial Average fell 0.39% to close at 32,825.95 points, while the S&P 500 lost 0.16% to 3,962.71. The Nasdaq Composite edged up 0.09% to 13,471.57.

E-mini futures for the S&P 500 slipped 0.04% on Wednesday.

Gold prices edged up to their highest level in more than two weeks on the prospect of higher inflation.

Spot gold rose about 0.2% to $ 1,734.81 an ounce.

Oil prices fell amid demand concerns after Germany, France and other European countries suspended use of AstraZeneca’s vaccine, a move that could dampen the strength of the economic recovery of the region.

Brent futures slipped 12 cents to $ 68.27 a barrel and US crude futures slipped 3 cents to $ 64.77 a barrel.

Reporting by Kevin Buckland; Edited by Kim Coghill


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