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Asian Stocks Mixed As Fed Monetary Policy Call Looms

Asian Stocks Mixed As Fed Monetary Policy Call Looms

David Cottle, Analyst

Talking Points

  • Asian markets were mixed on Wednesday as investors looked to the Fed
  • Apple earnings disappointment saw some suppliers struggle
  • The New Zealand Dollar got a data lift

Get live coverage of major Asia/Pacific market events with the DailyFX webinars.

Tuesday was another mixed session for Asian markets. Wall Street gains were soured by disappointment at Apple’s earnings. The tech titan has many suppliers in the region.

Investors also looked ahead to the US Federal Reserve’s monetary policy call. That will as always come long after the local market close, at 1800 GMT. No change is expected to the Fed funds target rate, but the extent to which the Fed sets markets up for a rise next month is likely to be the markets’ key concern.

Markets in Japan, Hong Kong and South Korea were closed for holidays, and Japan will be out for the rest of the week. Australia’s ASX was down 0.9% with both financials and materials weighing. The Shanghai Composite shed 0.4% but Taiwan stocks managed 0.1% gains.

The US Dollar traded steadily although just below Tuesday’s six-week high of 112.33 against the Yen. The greenback wasn’t hit too hard by that session’s weak US retail sales numbers.Meanwhile the New Zealand Dollar hit one-week highs on news that its home country’s jobless rate fell to near six-year lows in the year’s first quarter.

Crude oil prices bounced back as a decline in US inventories put a floor under trading. However, a reported fall in compliance with production cuts from the Organization of Petroleum Exporting Countries, along with still-high stocks kept the lid on. US crude and Brent both rose about 1% in the Asian session. Gold prices slipped a little to three-week lows as investors looked toward the Fed, higher interest rates and even less reason to hold the non-yielding metal.

Fed aside, the rest of Wednesday offers investors Eurozone first-quarter growth data, along with plenty of US numbers. Investors will get a look at the Automatic Data Processing employment snapshot, the service sector Purchasing Managers Index and the similar “non-manufacturing” index from the Institute for Supply Management. As the Fed follows all these, any impact from them is likely to be muted.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.