Asian markets brace for Fed rate hike

Asian markets brace for Fed rate hike

In an eventful week that includes a Federal Reserve rate decision, Bloomberg shares in Asia looked set to extend monthly advances on Tuesday.

Australia's benchmark held near its highest since April, while futures contracts pointed to increases in Japan and Hong Kong. The US stocks fell more than a month in Monday, with the Nasdaq 100 suffering its worst day since December 22 and the S&P 500 falling since January 18 after declines in Apple and Microsoft Corp. weighed on both the indexes.

Australian and New Zealand bond yields went up after a gain of three basis points in the rate on benchmark 10 year Treasuries. China's purchasing managers surveys will be closely watched for signs of a potential rebound.

The Fed is expected to raise rates by a quarter point on Wednesday, slowing its pace for a second straight session. The tone officials set for future meetings will be watched by traders. He won't budge until inflation has eased, as Fed Chair Jerome Powell continues to push back against traders anticipating rate cuts later this year. In January stock prices rallied, with investors brushing off Powell's higher-for- longer warning.

Traders are waiting for the US jobs report later this week. A less tight labor market is a key goal for the Fed. The investors have been parsing a slew of earnings reports, with more coming from companies like Alphabet Inc. and Meta Platforms Inc. this week. There are signs of earnings pressure on the economy and the outlook for equity.

A team of Morgan Stanley strategists led by Mike Wilson said that investors adding to the rally in stocks this month will be disappointed if they are in direct defiance of the Fed. Citi Global Wealth s Kristen Bitterly echoed this, saying that January's rally was technical as it was largely driven by 2022 s laggards and losers. Oil fell to its lowest in three weeks on Monday, heading for its third monthly drop as traders bullish on Chinese demand wait for the rebound in consumption to ripple from industrial metals to crude. The dollar index has wiped out some of its monthly decline, while the dollar index is poised for its best January since 2013.

Some of the biggest moves in markets are:

The offshore currency was little changed at 6.7570 per dollar.

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