Asian markets see a mixed bag

Asian markets see a mixed bag

Jamie McGeever takes a look at the day ahead in Asian markets.

There was something for everyone, so when Asian markets go on Wednesday, it's a coin flip, as well as a coin flip, according to Fed Chair Jerome Powell.

Wall Street was boosted and the dollar was dented by Powell's reluctance to say January's blowout jobs data means interest rates need to be higher than the Fed officials estimated late last year.

He said it will take some time to get the inflation genie back in the 2% bottle. Bond prices slipped, yield curves became steepened, the expected terminal rate clung to 5.15% and the amount of implied policy easing this year slowed at around 15 basis points.

The Reserve Bank of India is expected to raise its key interest rate by 25 basis points to 6.50%, which most economists reckon will be the last of the hiking cycle.

More than three-quarters of the 52 economists polled by Reuters last month expect the quarter point to increase, and 12 predict no change. But beware of surprises, as Australia's central bank showed on Tuesday.

The Indian rupee goes into the meeting at a one-month low against the dollar, under pressured by the rate outlook and beaten by the Adani Group financial crisis, which has morphed into a political crisis.

The group is considering independent evaluations of issues relating to legal compliance, related party transactions, and internal controls after a U.S. short-seller's critical report on its businesses sparked over $110 billion losses in the group's market value.

Adani got some reprieve after JP Morgan said the group's companies are still eligible for inclusion in the bank's influential bond indexes, while ratings agencies say Indian banks' credit profiles are safe.

The rupee will be on RBI intervention alert with the rupee within a whisker of October's record low.

The Australian central bank raised rates to a decade-high and signaled it may tighten policy more than anticipated, and the Aussie dollar has a spring in its step, according to the regional FX.

The yen went higher on Tuesday, snapping a two-day losing run after strong wage growth data. There are three key developments that could lead to more direction for markets on Wednesday: