Earnings, Fed meeting, dollar moves

The logo of the Tokyo Stock Exchange (TSE), operated by the Japan Exchange Group Inc. is displayed. (JPX), at the stock exchange in Tokyo, Japan, on Friday, October 2, 2020.

Akio-kun | Bloomberg via Getty Images

SINGAPORE – Asia-Pacific markets fell on Monday as investors looked ahead to this week’s US Federal Reserve monetary policy meeting.

Japan’s Nikkei 225 is down 1% in early trading while Topix is ​​down 0.98%. In South Korea, the Kospi was down 0.47%.

In Australia, the ASX 200 is down 0.38%. The Energy, Materials and Money sub-indices fell 0.85%, 1.08% and 0.38%, respectively, with major banks, miners and oil stocks selling off. However, Commonwealth Bank shares rose 0.43%.

Last Friday, stocks sold globally. In the US, the high-tech Nasdaq Composite posted a 7.6% loss for the week, its worst level since October 2020, and also less than its record close of more than 14% in November.

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The Federal Open Market Committee is scheduled to meet on Tuesday and Wednesday to decide on the next steps for US monetary policy.

Rising inflation is a major concern for the US central bank and investors will be listening closely to hear how worried the Fed really is – Chairman Jerome Powell is due to brief the media on Wednesday afternoon local time after the FOMC released its statement.

“Markets were trading cautiously ahead of this week’s FOMC statement, which is expected to be hawkish and potentially setting the case for higher interest rates starting in March,” ANZ Research analysts wrote in a note Monday morning.

They said they doubt that the Fed will end quantitative easing this week as some in the market are speculating.

“We also suspect the Fed will start to tighten policy with a 50bp rate hike. Markets may stabilize if the Fed is not as hawkish as some worst-case fears suggest,” ANZ analysts added.

Currency and oil

In the currency market, the US dollar traded near stability at 95.685 against a basket of other currencies.

The Japanese yen was trading at 113.76 against the dollar, up from levels above 114.8 in the previous week. The Australian dollar was little changed at $0.7180.

Oil prices rose on Monday during Asian trading hours: US crude rose 0.8% to $85.82 a barrel.

US crude and global benchmark Brent rose for the fifth consecutive week last week, up about 2% for the week, Reuters reported. Prices are up more than 10% this year due to supply concerns.

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