By Paulina Duran
SYDNEY (Reuters) – Global stocks slowed just below record highs on Tuesday and currencies held in tight ranges as nervous investors waited for the Federal Reserve’s policy meeting, one of many decisions from the central bank this week that could set the tone for risk appetite.
The Reserve Bank of Australia was the focus on Tuesday as it stepped towards unwinding extraordinary stimulus policies in the event of a pandemic by dropping an ultra-low target for bond yields. The spotlight is now on the Fed and then the Bank of England, which also have meetings this week.
Asian stocks were mixed, the MSCI gauge of Asia-Pacific stocks outside Japan held at 4:35 GMT, down 0.4%, and futures indicated a weaker European and US open.
The MSCI Global Equity Index edged down 0.02%, with Pan Region and E-mini futures down 0.25% down 0.21%.
In Asia, the RBA has defied investor expectations for a more hawkish pivot, pushing the dollar and dollar lower and pushing up short-term bonds.
“The market was setting prices much higher,” said Stephen Miller, GSFM investment strategist. “They thought the RBA would take bigger steps to remove the monetary accommodation given the upside risks to inflation and I think the RBA made the minimum adjustment possible. “
The Aussie was down 0.25% to fall within its two-week range of $ 0.75 while the Kiwi was down 0.1% to $ 0.7172. Australia fell 0.5%.
Australian 3-year benchmark bond yields were 6 basis points lower at 0.98%, from their recent high of 1.267% on October 29, while 10-year bonds cut their earlier losses to push yields at 1.958%.
US 10-year yields remained stable and yields on 2-year Treasuries fell one basis point to 0.491%.
Chinese stocks fell 0.6%, led by financial and consumer companies even as the country’s cabinet pledged to further support the consumer services sector, while tech stocks pushed stocks higher. Hong Kong 0.6%.
The South Korean index gained 1.50%.
Overnight, Wall Street hit record highs thanks to gains in energy stocks and Tesla (NASDAQ :).
The index rose 0.26%, after eclipsing 36,000 points for the first time in intraday trading. The S&P 500 gained 0.18% while the S&P 500 added 0.63%.
The yen weakened 0.31% to 113.65 per dollar and the euro also fell 0.07% to $ 1.15995.
The Fed is expected to approve plans to cut its $ 120 billion monthly bond-buying program on Wednesday, while investors will also focus on comments on interest rates and the persistence of the recent surge in l ‘inflation.
“The elephant in the room is headline and core inflation, which is higher than the Fed anticipated,” said Steve Englander, head of G10 FX at Standard Chartered (OTC).
“We expect the (Federal Open Market Committee) to say that the Fed is ready to act decisively if inflation does not approach target levels at the end of the cut, but it does. still expects inflation to fall as supply constraints ease. We think investors will see it as advancing the likely timing of the Fed’s rate hikes, ”he said.
In commodities markets, a further 4% drop in Chinese coal prices on Tuesday pushed them 50% below last month’s record.
Oil prices have changed little as expectations of strong demand and the belief that a key producer group will not turn on the taps too quickly helped reverse the initial losses caused by the release of fuel reserves. by the world’s largest energy consumer, China.
was down 0.08% to $ 83.98 a barrel and was trading at $ 84.76, up 0.03%.
was 0.1% higher at $ 1,793.24 per ounce. was 0.7% higher at $ 61,365.2.