Asian action remains steady as the Fed looms, may chaotic agreement over Brexit


TOKYO (Reuters) – Asian stocks held tight on Tuesday in anticipation of a meeting of the US Federal Reserve, but were largely supported by the record high of 6 and a half months expected by the central bank in a dovish tone, while new concerns about the Brexit weighed on the pound.

FILE PHOTO: Men examine stock market listings outside a brokerage house in Tokyo, Japan on December 5, 2018. REUTERS / Issei Kato

European equities should open slightly lower with better financial spreads, with the UK FTSE, the French CAC and the German DAX falling between 0.03 and 0.12% each.

The broadest MSCI index of Asia Pacific ex-Japan equities was virtually stable, returning to its highest level since September 4, earlier in the session.

Japanese Nikkei and Australian stocks both plunged 0.1%.

In China, the Shanghai Composite benchmark lost 0.2% and the CSI 300 first class lost 0.4%, while the Hong Kong Hang Seng was almost unchanged.

The three main Wall Street indices rose overnight, thanks to the banking and technology sectors, with the Dow Jones Industrial Average, the S & P 500 and the Nasdaq Composite each representing between 0.3 and 0.4%. [.N]

"Speculators seem to bet on a rise in stock prices on the back of a dovish Fed. It is unlikely that the Fed will kill such hopes. Still, the Fed could risk losing weight, "said Masanari Takada, multi-asset strategist at Nomura Securities.

With global economic growth seemingly slowing, traders have focused on the Fed, which is launching a political meeting two days later in the day, to find clues as to the likely evolution of US borrowing costs. .

In particular, investors will look for whether policymakers have lowered their interest rate expectations enough to more closely align their "point chart," a chart that illustrates the individual views of policy makers for the next three years.

We also expect more details on a plan to stop reducing the Fed's assets by nearly $ 3.8 trillion in bonds.

"A central point is when the Fed will omit the word" patient "in its statement, as this would be a prerequisite for a rate hike," said Toru Yamamoto, chief fixed income strategist at Daiwa Securities.

On the foreign exchange market, the pound has recovered some ground after slipping to 1.3183 USD in the previous session, while lawmakers have questioned the third attempt by Prime Minister Theresa May to obtain that the Parliament supports its agreement on Brexit. [GBP/]

Brexit's May plans were plunged into turmoil on Monday when the Speaker of Parliament said she could not submit her divorce agreement to a new vote unless it was resubmitted in a new form. fundamentally different.

May has only two days to get approval for her exit from the European Union if she wants to go to a summit with bloc leaders on Thursday, with something to offer them in exchange for more time.

Senior diplomats have said that EU leaders could wait for any final decision on a Brexit delay when they meet in Brussels later this week, depending on what May may ask of them.

The dollar index versus a six major currency basket eased 0.1% to 96.450, hovering its lowest level in two weeks. The index lost 1.2% after peaking at 97,710 in three months on March 7th.

The Japanese yen rose 0.1% to 111.28 yen to the dollar, while the euro was almost stable at 1.1337 dollar.

Oil prices skirted the peaks of 2019, supported by the reduction in supply led by the OPEC producers' club. US sanctions against oil producers, Iran and Venezuela, also raise prices, although traders said the market could be limited by rising US production. [O/R]

Futures on West Texas Intermediate (WTI) in the United States fell 0.1% to $ 59.01 per barrel, close to the peak of $ 59.23 in 2019 the previous day. Brent crude futures have barely changed at $ 67.58, not far from the $ 68.14 high this year.

Reportage of Tomo Uetake; Additional report by Hideyuki Sano; Edited by Kim Coghill and Sam Holmes

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