Talking Points:
- The Fed was in charge of Asian markets today as investors awaited its monetary verdict
- Stocks were mixed in the interim, with Toshiba weighing on the Nikkei
- Oil prices swooned as OPEC revealed a rise in output
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Asian markets were hunkered down to await the US Federal Reserve’s monetary policy decision on Wednesday, with a mixed tone to stock markets in the runup.
The US central bank’s two-day policy meet is widely expected to end with another quarter-percentage-point interest rate rise, but markets are understandably keen for any steer on how many more of these there may be.
The Nikkei lost 0.1%, with Toshiba under some pressure on reports that it is facing another huge law suit over what it called “accounting issues.” Australia’s ASX added 0.8% but most other regional bourses were down, if not by very much.
Local data were mixed too. China’s industrial production cheered the Australian Dollar by inching past expectations, although the rest of the day’s Chinese number deluge came in about as expected. Australian consumer confidence took another knock, but this passed markets by.
Currency markets were otherwise dull, as investors looked to the Fed. The US Dollar index was all-but flat, with USD/JPY torpid too.
Crude oil prices shed about 1%- or 50 cents a barrel- for both the US benchmark and international Brent. The Organization of Petroleum Exporting Countries reported a rise in production despite pledges to cut back, while numbers out of the US had shown yet another stock build.
Gold prices inched higher once again, but could come under some pressure if the Fed doesn’t change its interest-rate outlook.
No prizes at all are on offer for guessing what will dominate the remainder of the session. However, before investors hear from the Fed they’ll get a look at US and UK consumer prices along with Eurozone industrial production figures. There’s yet-more US crude-inventory data coming up too.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
