Asian markets off to a slow start in central bank packed week
By Stella Qiu
SYDNEY (Reuters) — Asian shares started cautiously on Monday in a week packed with central bank meetings that include the Federal Reserve and the Bank of Japan, which will be closely scrutinised for the global interest rate outlook.
Both S&P 500 futures and Nasdaq futures rose 0.2% in early Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% after gaining 1.2% last week. Japan's Nikkei is closed for a holiday.
Sentiment in Asia improved recently after news of more policy support from Beijing and better-than-expected Chinese data add to signs the slowdown in world's second largest economy could have past it worst.
However, the stress in the property sector persisted, with the fear that it is spreading to the financial system. Troubled Chinese trust firm Zhongrong International Trust Co said it was unable to make payments on some trust products on time.
This week, global central banks will take centre stage, with five of those overseeing the 10 most heavily traded currencies — including the U.S. Federal Reserve — holding rate-setting meetings, plus a swathe of emerging market ones as well.
Markets are fully priced for a pause from the Fed on Wednesday, so the focus will be on the updated economic and rates projections, as well as what Chair Jerome Powell says about the future. They see about 80 basis points of cuts next year.
«In theory, the FOMC meeting should be a low-volatility affair, but it is a risk that needs to be managed,» said Chris Weston, head of research at Pepperstone.
«We should see the median projection for the 2023 fed funds rate remaining at 5.6%, offering the bank the flexibility to hike again in November, should the data warrant it.»
Weston added that if the
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