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By Elizabeth Dilts Marshall
NEW YORK (Reuters) – Asian stocks are expected to open mostly lower on Wednesday following a sell off in US stocks, as investors waited for the Federal Reserve meeting and whether the central bank will keep interest rates close zero in the context of the post-pandemic economy recovery.
The Australian S & P / ASX 200 index lost 0.34% at the start of the session.
Japanese Nikkei 225 futures fell 0.20%, while Hong Kong Hang Seng index futures rose 0.34%.
S&P 500 E-mini futures rose 0.13%.
The S&P 500 and Dow Jones fell late Tuesday as yields on longer-dated US Treasuries rose. This investor optimism has hurt economic aid and vaccination campaigns.
The Dow Jones Industrial Average was down 0.39% to end at 32,825.95 points, while the S&P 500 lost 0.16% to 3,962.71. The Nasdaq Composite edged up 0.09% to 13,471.57.
The recent volatility in the money markets has fueled speculation that the Federal Reserve may be forced into a technical adjustment of the levers controlling its benchmark interest rate, but few expect the central bank to act on the issue when it comes down to it. this week’s meeting.
“We expect (President Jerome) Powell to note that the (Federal Open Markets Committee) has the tools to intervene if the bond market becomes messy or hinders economic recovery,” Commonwealth Bank of Australia analysts wrote. . “But we expect Powell to push back discussions on tightening policies due to the severe weakness in the labor market.”
“US bond yields and the US dollar could jump if the FOMC’s post-meeting statement and Powell’s statement are not seen as dovish enough.”
The Fed should forecast that the US economy will grow in 2021 at the fastest pace in decades.
The Bank of England is also meeting on Thursday, and the Bank of Japan concludes a policy review on Friday in which it could phase out a numerical target for its asset purchases.
The yield on the 10-year benchmark note fell to 1.5281%, from 1.544% on Tuesday night.
Oil prices fell again on Tuesday amid concerns over demand after Germany, France and other European countries suspended use of AstraZeneca’s vaccine.
In foreign currencies, the dollar posted small gains, with evident caution ahead of central bank meetings.
The dollar index rose 0.059%, the euro down 0.22% to $ 1.1902.
The Australian dollar fell 0.01% against the greenback to $ 0.774.
The Japanese yen strengthened 0.09% against the greenback to 109.01 per dollar.
Gold fell slightly on Tuesday, under pressure from a stronger dollar. US gold futures stabilized 0.1% at $ 1,730.90.
Brent futures stabilized 49 cents to $ 68.39 per barrel and US crude futures fell 59 cents to $ 64.80 per barrel.
(Reporting by Elizabeth Dilts Marshall; Editing by Cynthia Osterman)
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