17/06/2021 Asian stocks and U.S. futures have declined this morning after Federal Reserve officials sped up their expected pace of policy tightening. An MSCI gauge of Asian shares was on track for its biggest slide in a month, though the number of stocks that rose and fell was evenly split. Emerging market currencies tumbled, led by the South Korean won, after the DXY had its biggest jump in a year.
Investors had been looking for some clarity on the Fed’s plans to dial back some of the stimulus that is helping the recovery from the pandemic. Powell said officials had begun a discussion about scaling back bond purchases after releasing forecasts projecting a faster-than-anticipated pace of tightening.
Locally we need to play catch up after yesterday’s Youth Day holiday, on Tuesday the All share index fell the most in almost two weeks down 0.93 percent, with miners, banks, and retailers posting the biggest losses. Miners could continue the sell off with BHP and RIO down 1.34 and 1.29 percent respectively. Keep an eye on the precious metals as Gold lost 2.7 percent after the Fed announcement, the metal has regained 0.5 of a percent from the lows. U.S Futures are softer, Tencent is down 0.59% and IG Markets are down 290 points so we will be in-line for a bumpy start.
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European stocks are expected to open lower as global markets react to the Federal Reserve’s signal that rate hikes will come sooner than expected. Major markets did end positive yesterday ahead of the Fed and the Presidents Putin and Biden meeting. FTSE +0.17%, CAC +0.20% and the DAX a tad softer down just 0.12 percent. Futures across the region all point to a lower opening.
U.S. stocks fell overnight after the Fed’s initial statement and economic projections, the markets rallied off their intraday lows after Fed Chair Jerome Powell said projections for future rate increases should be “taken with a big grain of salt” and reiterated that he believes that inflation is transitory. The Dow closed the day 265 points lower, the index dropped as much as 382 points during the day. The S&P 500 lost 0.5% and the Nasdaq dipped 0.24%. Futures are lower with the Dow down 103 points, the S&P down 13 points and the Nasdaq 58 points lower.
Shares in Asia-Pacific are mixed as investors watched for the market reaction after the U.S. Federal Reserve moved up its timeline for rate hikes. The ASX 200 fell 0.2%. Australia’s employment increased by 115,000 people from April to May, the country’s Bureau of Statistics said Thursday. That was far higher than a 30,000 increase in employment expected by analysts in a Reuters poll. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.49%.
Gold prices hover near a more than one-month low as the dollar and U.S. Treasury yields jumped after Federal Reserve officials projected interest rate hikes sooner than expected. Gold dropped 2.7 percent to $ 1810 after the FED announcement, the metal has recovered a bit and is trading at $ 1813. Platinum – 0.34% at $ 1121 and Palladium down 1.05% at $ 2779.