Asian shares rise in early trade ahead of FED meeting

Asian shares rise in early trade ahead of FED meeting

Asian shares rose in early trade on Tuesday, as investors are anticipating a Federal Reserve policy meeting to find out if the central bank would signal any change to the U.S. monetary policy outlook.

In early trade, Japan’s Nikkei edged 0.89% and MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.23%.

Australian shares which rose 1.03% were an early driver, though Chinese blue chips dropped 0.16% and Hong Kong fell 0.21%. All three resumed normal trading after being shut on Monday for a public holiday.

Overnight the S&P 500 and Nasdaq closed at record highs, helped by tech names, though the Dow Jones Industrial Average fell 0.25%.

U.S. stock futures, the S&P 500 e-minis, were also up 0.11%.

Traders will appear carefully at any hints in the meeting’s final statement about whether the given intends to taper its bond-buying program, among concerns from some quarters about inflation because the U.S. economy bounces back from the pandemic fallout. 

Currency markets were quiet ahead of the meeting, with the dollar index, which measures the greenback against a basket of six currencies, broadly flat at 90.502 in early Asia trading.

Benchmark 10-year yields were 1.4872%, little changed from Monday when they rebounded from Friday’s three-month low.

As for commodities, U.S. crude ticked up 0.55% to $71.27 a barrel, and Brent crude was at $73.24 per barrel, having touched on Monday $73.64 a barrel, its highest since April 2019.

Spot gold was down slightly at $1862.21 per ounce.

The price of bitcoin hit a three-week high on Monday, climbing back above $40,000 after Elon Musk said that Tesla would resume allowing transactions made in the digital currency once crypto mining becomes greener.

Damon Harrison
Market Analyst, IPG Group