Fed goes big, markets yo-yo
By Jamie McGeever
Sept 19 (Reuters) -A look at the day ahead in Asian markets.
"Go big, and go bold," was the advice to Fed Chair Jerome Powell and colleagues from some U.S. policy watchers and even former policymakers, and didn't they do just that.
The Federal Reserve's half percentage point interest rate cut on Wednesday was a statement of intent that the Fed stands ready to protect the labor market and steer the economy away from anything approaching recession.
Investors liked it, at first. The S&P 500, Dow and gold all leaped to fresh record highs, the Russell 200 small caps index rallied nearly 2%, and the dollar fell across the board.
But stocks' and gold's gains melted away and the dollar bounced back from a 14-month low to close the U.S. session up on the day.
What gives? Maybe the bond market reaction was most prescient. Treasury yields rose across the curve, more so at the longer end, perhaps on underlying worries over inflation and easier financial conditions, or because the Fed slightly revised up its long-run forecast for the fed funds rate.
This sends mixed signals for Asian markets on Thursday.
Who says central banks no longer retain the element of surprise? Bank Indonesia's quarter-point rate cut on Wednesday was not on the cards - only three of the 33 economists polled by Reuters predicted the move, with the remaining 30 expecting the policy rate to be left at 6.25%.
Perhaps surprisingly, the rupiah didn't move much and stuck close to its strongest levels against the dollar in about a year.
Now that the Fed has taken its first step on its easing path also, other central banks in Asia are likely to feel more comfortable loosening policy. But not Taiwan, not yet at least.
Taiwan's central bank is expected to keep its policy interest rate unchanged on Thursday, according to all 32 economists surveyed in a Reuters poll, and stay the course until late next year as it deals with lingering inflation concerns.
The central bank left the benchmark discount rate at 2% as expected at its last quarterly meeting in June, having hiked it to that level from 1.875% at the prior meeting in March.
Investors in Asia also have New Zealand GDP, unemployment figures from Australia and Hong Kong, and trade data from Malaysia on their plate on Thursday.
Traders may also be adjusting positions ahead of Japanese inflation figures and rate decisions on Friday from the Bank of Japan and People's Bank of China.
The dark cloud of deflation hangs heavily over China, especially the property sector. Previous housing market crashes around the world suggest it could take China a decade to recover from the bubble currently bursting. And that's if prices even get back to their pre-bubble peaks.
Here are key developments that could provide more direction to Asian markets on Thursday:
- Taiwan interest rate decision
- New Zealand GDP (Q2)
- Australia unemployment (August)
Fed cuts rates by 50 bps, joins easing cycle https://reut.rs/3MPDwzD
Dollar/yen's yo-yo trading after Fed decision https://tmsnrt.rs/3BaIrbX
China house price crash in global context https://tmsnrt.rs/3B93fR3
Reporting by Jamie McGeever
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
