Wednesday, 20 September 2017

Asian markets steady as investors focus on Fed’s meeting

Posted by Valentine at 11:49 Labels:

Top Asian equity indexes were little changed on Wednesday, with most market participants opting for a cautious positioning ahead of Fed’s September monetary policy announcements.

Australia ASX -2.70 -0.05% 5,769.70 OPEN
Shanghai Comp +8.82 +0.26% 3,365.66 OPEN
Hang Seng Index +68.33 +0.24% 28,119.74 CLOSED
Nikkei 225 +11.08 +0.05% 20,310.46 CLOSED
TSEC 50 Index -56.97 -0.54% 10,519.17 OPEN

The US regulator ends its September encounter later in the day, with barely no expectations for interest rate changes, which currently stand in a range between 1.00 and 1.25 percent.

That being said, attention will be directed to Fed Chair Janet Yellen’s press conference at 18:30 GMT, with investors searching for hints on the future of interest rates and the plan to unwind the central bank’s massive $4.5 trillion bond stake.

Market players will also be paying close attention to the revision of Fed’s economic projections and the Federal Open Market Committee dot plot, a chart that displays each member’s position regarding interest rate decisions.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 56.4 percent probability of a 25 basis points rate hike by December.

In the light of this key event, the US dollar eased across the board. The dollar index, which gauges the greenback vs six major rivals, was 0.02 percent down at 91.55 as of 07:05 GMT.

The American currency was also weakened by President Donald Trump’s remarks at his first appearance in the United Nations. The Republican leader said Kim Jong Un’s regime will be “totally destroy” if it threatened the US or any of their allies.

Tensions in the Korean peninsula are having less negative effects on stock and currency markets these last few days as players turned their focus to policy meetings in the US and Japan. The Bank of Japan is gathering on Thursday, with rates seen at -0.10 percent.

Overnight, Japanese trade data suggested its economy is performing well. Exports rose by 18.1 percent in yearly basis, above a forecasted 14.7 percent build. Trade surplus came in at 113.6 billion yen, also outperforming expectations for a 93.9 billion reading.

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