Asia stocks edge higher, Fed stars in central bank extravaganza

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SYDNEY : Asian stocks crept higher on Monday as investors prepared to tiptoe through a minefield of 17 central bank meetings this week and the likely early end to U.S. policy stimulus.Omicron remained a concern with British Prime Minster Boris Johnson warning of a 'tidal wave' of new cases of the coronavi

SYDNEY : Asian stocks crept higher on Monday as investors prepared to tiptoe through a minefield of 17 central bank meetings this week and the likely early end to U.S. policy stimulus.

The market is already well ahead, with a rise to 0.25per cent fully priced in by May and rates of 0.75per cent by year end. "The outlook of global monetary policy in transition across multiple geographies at varying speeds is a recipe for volatility, and one could argue so are increased risks around the virus," said John Briggs, global head of desk strategy at NatWest Markets.MSCI's broadest index of Asia-Pacific shares outside Japan started with a 0.2per cent gain, after bouncing 1.7per cent last week.

The Treasury market has taken the risk of earlier Fed hikes with equanimity, perhaps in the belief that it will mean lower inflation over the long run and a lower peak for the cash rate. "We think the bar for a hawkish surprise from the Fed is set high, so unless it delivers a major revision to its forward guidance, the dollar rally looks due a pause," said Jonathan Petersen, a market economist at Capital Economics.On Monday, the dollar index was steady at 96.069, having held between 95.848 and 96.594 for the past week or so.

 

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