HONG KONG – Asian markets were mixed on Thursday as investors took a breather after the latest demonstration as they tried to assess when the Federal Reserve will begin winding down its huge monetary easing program.
After a turbulent start to the week, equities in large parts of the region have been gaining ground over the past two days as US central bankers appeared to fear fears that record low interest rates and colossal bond purchases were in the end.
Traders have been worried for months that the blistering global recovery will create inflation and force officials to act.
And the Fed – which has consistently said that recent inflation rises were temporary and that it will maintain its policy for as long as the economy needs – last Wednesday proposed for the first time that it could raise borrowing costs in 2023, a year earlier than originally planned. .
In the last few days, a number of top officials have tried to tame expectations, which provided some consolation, but traders are still nervous.
On Wall Street, the Dow and S&P 500 closed slightly lower, although the Nasdaq ended at another record high.
Asian investors joked about position with markets fluctuating.
Tokyo, Hong Kong, Singapore, Seoul, Taipei and Jakarta all rose, but Sydney, Shanghai, Wellington and Manila fell.
On Wednesday, a couple of Fed officials filed their case for a possible tightening of the bond buying program by the end of this year.
Dallas Fed chief Robert Kaplan saw interest rate hikes as early as next year due to the strong economic recovery and a settlement of bond purchases soon.
2022 rate increase eye
“When we make significant further progress that I think will happen faster than people expect … I think we would be in a much better position, from a risk management point of view, and start adjusting these purchases of government bonds and collateral, He told Bloomberg News.
Starting tapping past would provide more flexibility in terms of future rate hikes, he said.
He expected inflation to reach 3.4 percent this year and 2.4 percent next year. The Fed’s official target is two percent.
Meanwhile, Atlanta Fed Chairman Raphael Bostic proposed a slowdown in bond buying over the next few months, while predicting a rate hike next year and two in 2023.
National Australia Banks Tapas Strickland said that although there did not appear to be any major reaction to Bostic’s comments, his “move from pigeon to slightly hawkish should be noted, suggesting that a hike in 2022 is a real possibility if the data warrant it. ”.
Still, OANDA’s Edward Moya added: “The Fed is still far from making significant progress in the labor market, so Wall Street should not expect any escalating announcement until after the summer is over.”
Oil prices plunged slightly after Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said OPEC and other major producers had a role to play in “taming and containment, by making sure this market does not get out of hand”. The sharp rise in commodities this year has played a key role in inflation.
His comments come just ahead of the group’s latest output policy meeting, and as crude prices are around multi-year highs, and some analysts have expected them to potentially go up to $ 100 as demand continues to rise with the global recovery.
Key figures at 0230 GMT
Tokyo – Nikkei 225: OP 0.2 percent at 28,920.12 (pause)
Hong Kong – Hang Seng Index: UP 0.5 percent at 28,949.56
Shanghai – Composite: DOWN 0.1 percent at 3,562.98
Euro / dollar: DOWN at $ 1.1923 from $ 1.1932 at 2115 GMT
Pound / Dollar: Up to $ 1.3965 from $ 1.3962
Euro / pound: UP at 85.40 pence from 85.39 pence
Dollar / yen: OP at 111.03 yen from 110.95 yen
West Texas Intermediate: Down 0.1 percent to $ 73.02 per share. Barrel
Brent North Sea raw: DOWN 0.1 percent to $ 75.11 per. Barrel
New York – Dow: Down 0.2 Percent at 33,874.24 (Close)
London – FTSE 100: DOWN 0.2% at 7,074.06 (close)
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