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Asian stocks had a mixed day on Tuesday, with the dollar near a multi-week high ahead of a much-anticipated Federal Reserve policy meeting, where investors look for hints of some change in the monetary policy outlook of the United States. The United States.
Japan’s Nikkei (.N225) rose 1.05% and the Australian benchmark (.AXJO) rose 0.93%, but Chinese blue chips (.CSI300) fell 0.97%.
As a result, MSCI’s broadest index of Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) remained stable.
China’s markets were closed on Monday for a holiday, meaning this was their first response to a joint statement by Group of Seven leaders who insulted Beijing over a series of issues declaring China gross meddling in the country’s domestic affairs. mentioned. read more
However, futures indicated that the European and US markets would open higher. US stock futures were up 0.16%, Euro Stoxx 50 futures were up 0.39% and FTSE futures were up 0.31%.
“We are still getting a positive response from the markets to lower bond volatility and lower yields, and a sense that inflation will be fairly temporary so the Fed doesn’t have to put the brakes on,” said Kyle Rodda, market analyst at real estate agency IG.
“I suspect we’ll see a lot of hitches in the next 24-48 hours, first on the upside, then a little correction as the market positions itself, and then we’ll go to the races when we get the green light from the Fed on Thursday morning,” added Rodda.
The two-day meeting will begin on Tuesday, with a final statement to be published after the meeting closes on Wednesday.
Traders around the world are looking for hints as to whether and when the Fed plans to wind down its bond-buying program amid concerns from some circles about inflation as the US economy recovers from the pandemic. read more
“Now domestic Chinese investors are increasingly aware of the global picture. Ten years ago they paid no attention to the rhetoric of the Fed chairman, but today it is a really important point,” said Qi Wang, CEO of asset manager MegaTrust Investment. (HK).
Nearly 60% of economists in a Reuters poll expect a winding announcement in the next quarter, despite a patchy recovery in the labor market. read more
“While no immediate changes in monetary policy are expected, an increase is expected in the proportion of FOMC members who believe rates should rise in 2023,” ANZ analysts wrote in a note to customers.
“If three more members raise interest rates before 2023, that would make the majority decide to change rates relatively quickly,” they said.
STRONG DOLLAR
In the foreign exchange markets, the dollar held steady on its gains against major currencies. The dollar index stood at 90,475, not far from the top of its recent range.
Data on retail sales and industrial production expected later on Tuesday could lead to modest volatility in the USD, analysts at CBA wrote in a research note.
In light of the strong dollar, spot gold fell slightly to $1,862.21 an ounce.
The benchmark’s 10-year yield stood at 1.4838%, little changed from Monday, when they recovered from Friday’s three-month low.
In commodities, US crude was up 0.38% to $71.15 a barrel. Brent oil rose to $73.15 a barrel as talks continued over the United States and rejoined a nuclear deal with Tehran, suggesting an increase in supplies from Iran may be some time away.
Even bitcoin was fairly quiet, hovering slightly above $40,000. It rose on Sunday and Monday after Elon Musk said Tesla could resume accepting payments in the world’s largest cryptocurrency at some point in the future. read more
Our standards: The Thomson Reuters Trust Principles.
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