Asian shares traded cautiously and bonds nursed small losses on Tuesday as investors braced for an eventful week that includes central bank meetings, a slew of earnings reports and key US economic data.
Investors broadly expect the US Federal Reserve will raise interest rates by 25 basis points (bps) on Wednesday. Rate announcements are due on Thursday from both the Bank of England and the European Central Bank – and both are expected to hike rates by 50 bps.
Meanwhile, more than 100 S&P 500 companies including Apple, Amazon.com and Google parent Alphabet are expected to report results this week, which also will see the publication of closely watched US employment numbers.
“It’s a big week for both central banks and US equities, with … some of the household names due to make earnings announcements that will provide a micro overview of the macro economy,” ANZ analysts said in a note.
“We expect a 25 bps (US) rate rise and anticipate that the Fed will caution against an early pause in the tightening cycle … Risk appetite could be vulnerable to a correction.”
Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1 percent. US stock futures, the S&P 500 e-minis, rose 0.1 percent.
Japan’s Nikkei stock index slid 0.1 percent while Australian shares were up 0.2 percent.
China’s blue-chip CSI300 index remained flat in early trade. Hong Kong’s Hang Seng index opened up 0.4 percent.
On Monday, US stocks lost ground with the major indexes sinking, weighed down by declines in technology and other giant corporations’ shares.
The Dow Jones Industrial Average fell 0.8 percent to 33,717.09, the S&P 500 lost 1.3 percent to 4,017.77 and the Nasdaq Composite dropped 2.0 percent to 11,393.81.
Despite Monday’s declines, the S&P 500 remained on track to post its biggest January gain since 2019.
At the end of the Fed’s two-day policy meeting on Wednesday investors will be glued to Chair Jerome Powell’s news conference for clues on whether the rate-hiking cycle may be coming to a close, and for signs of how long rates could stay elevated. — Reuters
