Asian shares mixed as investors await crucial central bank decisions

Sydney, Nov. 2 (BNA): Asian stocks were mixed on Tuesday and currencies remained in tight ranges as anxious investors await several major central bank meetings that may set the tone for risk appetite in the year ahead..

MSCI’s gauge of Asia-Pacific shares outside Japan regained early losses to gain 0.8% at 01:28 GMT, with Japan’s Nikkei shedding 0.2% and Australia’s S&P/ASX 200 down 0.6%..

The immediate focus was on the Reserve Bank of Australia (RBA) meeting on Tuesday, when the Federal Reserve and the Bank of England are due to make their policy decisions later in the week.

“All eyes are on the RBA, said Adam Dawes, investment advisor at Shaw and Partners Ltd in Sydney.

“We expect the language to definitely start to change to be more accommodating of higher interest rates, or at least accommodating of the rollback of quantitative easing. “

A drop in the RBA’s main policy gauge targeting ultra-low short-term interest rates would signal a change in the bank’s pessimistic stance and could be a prelude to the Fed meeting that markets expect to mark the beginning of tapering bond buying..

Australian government bonds fell, with the benchmark 10-year yield rising five basis points at 1.973%, ahead of the Reserve Bank of Australia’s announcement after the meeting scheduled for 330 GMT..

Chinese stocks opened slightly lower, with local blue-chips trading down 0.09%, despite the Hong Kong benchmark up 1.8%. South Korea’s Kospi opened 1.50% higher..

Overnight, Wall Street advanced to record levels, buoyed by gains in shares of energy companies and Tesla.

The Dow Jones Industrial Average rose 0.26% after losing 36,000 points for the first time in daily trading. The S&P 500 gained 0.18% while the Nasdaq Composite added 0.63%..

Currency moves were slight in morning trading, as the dollar was hovering below recent highs after posting its biggest daily rise in more than four months last Friday..

The yen was slightly weaker at 114.11 per dollar and the dollar made up for a small overnight loss on the euro..

The Australian dollar, which has been flat during a week or so of wild selling in the local bond market, settled at $0.7521, although volatility metrics point to a bumpy week..

With high inflation looming on the financial markets, the Reserve Bank of Australia is leading a few central bank meetings to set its near-term interest rate outlook..

The pricing of the swaps suggests a better than even chance of a BoE hike, while the RBA is expected to formally abandon its yield curve control policy..

The Federal Reserve is expected to approve plans on Wednesday to scale back its $120 billion monthly bond-buying program set up to support the economy, while investors will also focus on comments about interest rates and how long the recent spike in inflation will continue.

“It (the Fed meeting) would be a relatively big deal, said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. We expect to hear the smooth path to tapering bond purchases.. “

In commodity markets, a 4% drop in Chinese coal prices on Tuesday sent them down 50% from last month’s high.

Oil prices settled higher on Monday as expectations of strong demand and the belief that a group of major producers will not turn on the faucets too quickly helped reverse the initial losses caused by the release of fuel reserves by China, the world’s number one energy consumer.

US crude rose 0.2% to $84.25 a barrel, and Brent crude was trading at $84.97, up 0.3%..

Spot gold fell 0.1% to $1,789.99 an ounce. Bitcoin was 0.5% higher at $61,285.23.

HF