(March 20): Asian stocks looked poised for a muted start Wednesday as investors held back from making big changes prior to the Federal Reserve’s policy decision. Treasuries steadied and the dollar dipped.
Futures indicated a flat start for Japanese shares, with equities in Australia and Hong Kong on course for small gains. A rally in U.S. stocks sputtered out after a report that U.S. and Chinese negotiators remain at odds on aspects of their current trade talks soured sentiment. A rally in oil stalled.
Money managers will be looking for clues on future policy from the Fed Wednesday after its dovish shift in recent months helped reboot global equities on bets that interest-rate hikes will be put on hold to support the economy. News that the Trump administration is concerned that China is pushing back against U.S. demands threatens to curb hopes of a deal.
Elsewhere, a senior European Union official said the bloc is likely to tell Theresa May that she must decide by mid-April whether to extend Brexit until 2020 or risk leaving in three months without a deal. The euro edged higher as data showed German investor confidence rose for a fifth straight month.
Here are some key events coming up this week:
Company earnings this week include Tencent, Hermes, Tiffany, Micron, Nike and PetroChina. On Wednesday, the Fed is expected to hold interest rates steady, announce plans for the end of asset roll-off from its balance sheet, and lower projections for the number of interest-rate hikes this year. Central banks in the U.K., Thailand, the Philippines and Indonesia are all scheduled for policy meetings. Euro-zone purchasing manager survey numbers on Friday will give an indication of the health of the region’s industrial and service sectors.
And these are the main moves in markets:
Futures on Japan’s Nikkei 225 were little changed. Hang Seng Index futures added 0.1 percent. Futures on Australia’s S&P/ASX 200 Index gained 0.1 percent. The S&P 500 Index closed flat Tuesday.
The yen held at 111.39 per dollar. The offshore yuan was steady at 6.7179 per dollar. The Bloomberg Dollar Spot Index fell 0.1 percent to the lowest in almost three weeks Tuesday. The euro bought $1.1352, little changed. The British pound was at $1.3270.
The yield on 10-year Treasuries gained one basis point to 2.61 percent.
West Texas Intermediate crude held at $59.03 a barrel. Gold was steady at $1,306.53 an ounce. - Bloomberg