- Asian stocks are mildly bid with Japanese stocks adding 0.11%.
- Most observers expect the Federal Reserve to cut rates by 25 basis points.
- The odds of a rate cut stood at 50/50 on Tuesday.
The Asian equities are flashing moderate gains as the US Federal Reserve (Fed) is likely to lower interest rates Wednesday for the second time in less than two months.
As of writing, Japan's Nikkei is trading 0.11% higher on the day and the Shanghai Composite index is adding 0.40%. Shares in Hong Kong are flat-lined, while their South Korean counterparts are up 0.5% on the day.
Australia's S&P/ASX 200 is down 0.18% at press time, largely due to losses in the energy shares.
The US stocks also eked out modest gains in the overnight trade with the Dow Jones Industrial Average adding 0.13%. As of writing, the futures on the S&P 500 are trading flat-lined.
Many observers believe the US Fed will cut rates by 25 basis points to a range of 1.75% to 2%.at 18:00 GMT despite firming inflation, healthy consumer spending and easing trade tensions. There’s no way they can walk that back at this point,” said Wells Fargo Senior Economist Tim Quinlan, according to USA Today.
The market, however, is not sure if the Fed will deliver the rate cut. For instance, the odds for a 25 basis point September rate cut, however, stood at about 50-50 on Tuesday vs. 62% Monday and well over 90% a week earlier.
If the Fed keeps rates unchanged or delivers a hawkish cut – reduces rates, but pushes back against expectations of a third rate cut later in 2019 - the stocks will likely come under pressure, pushing the Yen higher against most currencies.
The risk sentiment will get a boost if the Fed cuts rates by 25 or 50 basis points and signals more easing in the near-term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
With all eyes peeled on the halving, Bitcoin is the center of attention in the market. The pioneer cryptocurrency has had three narratives this year already, starting with the spot BTC exchange-traded funds, the recent all-time high of $73,777, and now the halving.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.