Kospi, S & P / ASX 200 retreated and waited for news from Fed

The red color overwhelmed the Asian stock market in the morning session of March 17 when investors waited for the signal of normalization of the policy of the US Federal Reserve (Fed).

South Korea’s Kospi index fell 0.64% in the morning session of March 17. Photo: AFP

The Federal Open Market Committee (FOMC) of the Fed plans to end its two-day meeting at the end of March 17 (US time). The stock markets in Asia – Pacific this morning, March 17th, continued to wait for news from the Fed. The MSCI Asia-Pacific Index (excluding Japan) fell 0.3% this morning, of which South Korea’s Kospi and Australia’s S & P / ASX 200 recorded the same level. the deepest decrease is 0.64% and 0.48%.

Japan’s Nikkei 225 this morning was upstream of the region and rose 0.1%, while the Topix index shook slightly and mostly went flat. On the mainland Chinese stock market, the Shanghai Composite Index fell 0.4%; in Hong Kong, the Hang Seng index slipped 0.2%.

World stocks have been volatile in recent weeks as US Treasury bond yields rose to their highest level in more than a year because bond investors believe the US accelerated Covid-resistant vaccination. 19 and launching a large fiscal stimulus package (1,900 billion USD) will boost the world’s largest economy and increase inflation faster than forecast.

Wind waves in the world’s major stock markets have sparked comments that the Fed will be forced to make technical adjustments to the interest rate control levers, but there is not much expectation that the Fed will adjust interest rates. right at this meeting, even if they forecast it better about US growth.

Commonwealth Bank analysts expect Fed Chairman Jerome Powell to note that the FOMC has the tools to intervene if the bond market becomes turbulent or hinders the economic recovery. “We expect Mr. Powell to delay discussion on policy tightening as much of the labor market is sagging,” Commonwealth experts said. The US can “dance” if the statement after the meeting of the FOMC and the statement of the Fed Chairman is not considered “moderate” enough.

According to the latest update on the morning of March 17 in Asia, the 10-year US Treasury bond yield continued to be stable at around 1.6% and 1.6197% specifically. For the first time since February 2020, this yield reached 1.6420% in the March 12 session.

Meanwhile, the greenback has shown signs of weakening compared to the previous week. The US dollar index against other major currencies reached 91.90, compared with a 3-month high of 92,506 set last week.

The outlook for the money market is also quite conservative and could last a whole week, with the Bank of England scheduled to announce a policy decision on March 18 and the Bank of Japan coming to an end. Policy meeting on March 19 and it is very likely that the Central Bank of Japan will cancel the target of buying on its assets.

On Wall Street, the Dow Jones industrial average last night lost 0.39% to 32,825.95 points, while the S&P 500 index slid 0.16% to 3,962.71 points. By contrast, the Nasdaq Composite moved upstream and edged up 0.09% to 13,471.57 points. E-mini S&P 500 futures contract this morning on March 17 fell 0.04%.

Gold price this morning inched up and fluctuated at the highest level in more than 2 weeks due to fears of rising inflation. Spot gold price increased 0.2% to 1,734.81 USD / ounce.

Meanwhile, the oil market has been bleak due to fears that oil demand will cut off momentum after Germany, France and some other countries in Europe stop vaccination against Covid-19 of the pharmaceutical company AstraZeneca, A move that could hamper the economic recovery of the region. Brent crude oil futures for this morning fell 12 cents to $ 68.27 / barrel, while the US crude oil futures prices fell 3 cents to $ 64.77 / barrel.