Business Maverick: Asia stocks gauge gains for first time in six days: markets wrap

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Stocks climbed in Asia following a rebound in the final hour of New York trading as investors shifted positions ahead of a flurry of central bank decisions this week led by the Federal Reserve.

“We recognise that after this week’s hike the funds rate will be placed comfortably into ‘restrictive’ territory,” Kevin Cummins, the chief US economist at NatWest Markets, wrote in a note. “It seems reasonable that officials will continue to err on the side of doing too much rather than too little and keep front-loading.”

Swap contracts that forecast rates over the next two years now peak around 4.5% in March 2023 – a full point higher than was expected after the last meeting in July. Strategists at JPMorgan Chase & Co estimate the Fed will increase rates to 4.25% by early next year. “We expect central bank tightening and a fading of supply chain pressures to moderate job growth and core inflation. In turn, we anticipate this will allow the Fed and other central banks to pause in 1H23,” strategists including Marko Kolanovic and Nikolaos Panigirtzoglou wrote in a note on Monday.after the central bank paused its monetary easing and defended a weakening yuan.

In a time-tested harbinger of an economic downturn, short-term US rates have exceeded yields on longer maturities for months. The MLIV Pulse survey, which drew 737 responses, showed that the bulk of contributors expect a . Some see it reaching levels last seen in the early 1980s, when Paul Volcker ratcheted up borrowing costs to break the back of hyperinflation.

 

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Business Maverick: Stocks fall in cautious start to key Fed week: markets wrapStocks declined in a cautious start on Monday as investors await a slew of interest rate decisions in the days ahead and after global equities notched their worst week since hitting this year’s low in June.
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