Asian markets drift with eyes on Fed policy meeting

  • In Business
  • 2020-09-16 08:21:16Z
  • By AFP
Asian markets drift with eyes on Fed policy meeting
Asian markets drift with eyes on Fed policy meeting  

Asian stocks were mixed Wednesday as investors trod a cautious path following a broadly positive start to the week, with focus on the outcome of the Federal Reserve's latest policy meeting.

Markets have enjoyed something of a respite from the roller-coaster ride seen earlier in the month, which saw a rout of previously surging technology firms, as vaccine hopes and upbeat economic data offset worries about fresh virus spikes and new containment measures.

With US lawmakers unable to agree on a new stimulus package -- despite the first running out last month, leaving millions of Americans struggling -- the onus has fallen on the central bank to do much of the leg work in supporting the world's top economy.

And while officials are not expected to unveil any fresh measures, having already indicated they will keep interest rates near zero for the foreseeable future, boss Jerome Powell's post-meeting comments will be pored over for an idea about the outlook and clues to future policy.

Wall Street "has priced out rate hikes to 2025, and when coupled with the fact the Fed has already ruled out the possibility of negative interest rates, it will be difficult, if not next to impossible, for the (policy board) to over-deliver on the dovish side tonight", said Stephen Innes at AxiCorp.

But National Australia Bank's Tapas Strickland warned stocks could suffer a pullback if investors were disappointed by the outcome.

"There is a risk the market is underwhelmed by the guidance provided by the Fed," he said in a commentary.

- Pelosi's new stimulus push -

"There is some expectation that with the US Congress unwilling/unable to agree to a new fiscal package, monetary policy may need to step in to fill the void. Accordingly, markets will be focused on any changes to forward guidance and to any balance sheet adjustments."

Sydney rose more than one percent, while Mumbai, Singapore, Wellington and Bangkok were also up. Hong Kong inched down slightly and Shanghai drifted lower along with Seoul, Manila and Jakarta.

London, Paris and Frankfurt all fell in early trade.

There was little reaction to the World Trade Organization's decision to uphold a Chinese complaint over additional US tariffs on around $250 billion of imports, which was slammed by Washington.

US Democratic House Speaker Nancy Pelosi on Tuesday announced a new attempt to break weeks of deadlock with the White House and Republican-controlled Senate on passing a new stimulus package.

"We are committed to staying here until we have an agreement," she said on CNBC, adding that she was "optimistic that the White House, at least, will understand that we have to do some things".

But with both sides miles apart on their proposals -- Democrats are aiming for $2 trillion and Republicans want to spend half of that -- there is little expectation a deal can be made any time soon.

"It may have to happen after the election, because there obviously are politics involved. This is Washington." Republican senator John Thune said, adding that "the clock is running out".

Morgan Stanley warned that failure to pass a fresh package would delay by six months the return of the stuttering economy to pre-pandemic levels of activity.

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 23,475.53 (close)

Hong Kong - Hang Seng: FLAT at 24,725.63 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,283.92 (close)

London - FTSE 100: DOWN 0.3 percent at 6,084.79

Euro/dollar: UP at $1.1862 from $1.1848 at 2050 GMT

Pound/dollar: UP at $1.2901 from $1.2888

Euro/pound: UP at 91.95 pence from 91.89 pence

Dollar/yen: DOWN at 105.25 yen from 105.45 yen

West Texas Intermediate: UP 2.2 percent at $39.12 per barrel

Brent North Sea crude: UP 1.9 percent at $41.31 per barrel

New York - Dow Jones: FLAT at 27,995.60 (close)



More Related News

A roller coaster six months leaves U.S. recovery still uncertain
A roller coaster six months leaves U.S. recovery still uncertain
  • US
  • 2020-09-24 10:04:48Z

As businesses shuttered and millions hit the unemployment line last spring, the most dour predictions saw the United States heading for another Great Depression of spiraling collapse and years of massive joblessness. Cash that households socked away over the summer from rich unemployment benefits will begin to run dry; small business loans appear to have limited bankruptcies and closures so far but were not designed for the long haul; Federal Reserve programs that helped unlock a massive round of private corporate financing may have left companies with difficult-to-service debt if business does not fully rebound. "Given the magnitude of the economic downturn triggered by the pandemic,...

Asian markets tumble again as virus, stimulus, election fan fears
Asian markets tumble again as virus, stimulus, election fan fears

Asian markets tumbled Thursday following another sharp sell-off on Wall Street as investors were bombarded by a perfect storm of problems including rising virus infections, new lockdowns, a slowing economic recovery, stalled US stimulus talks and election uncertainty.

Gold drops as dollar surges to six-week high
Gold drops as dollar surges to six-week high

U.S. gold futures were down 0.5% at $1,900.20 on Tuesday. "Resurfacing of the coronavirus and the fear that European countries will again go into lockdowns are triggering safe-haven buying in the dollar index and because of that we have seen correction in the gold prices," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

Fed policymakers urge Congress, state and local government action to close racial gaps
Fed policymakers urge Congress, state and local government action to close racial gaps
  • US
  • 2020-09-21 23:53:00Z

The Fed is helping to raise awareness of racial disparities in income and wealth by bringing together businesses, nonprofits and banks to work on addressing inequality, New York Fed President John Williams said during a webcast discussion with lawmakers organized by the Congressional Black Caucus. "What we really need is a really strong partnership where Congress and government at the federal state and local levels are doing their part on these issues... and we're all working together," Williams said.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business