Asian stocks seen lower; US Dollar holds gain on Fed

November 8, 2018 | By | Reply More

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Stocks in Asia looked set to decline for the first time in four days, tracking a drop in their US counterparts. The dollar held gains made after the Federal Reserve stayed on course to hike interest rates again in December and maintained its gradual tightening path.

Futures signalled recent equity rallies from Tokyo to Hong Kong would ease somewhat following declines in US stocks, though a weakening yen may offer some support in Japan.

Energy shares could come under pressure after oil fell a ninth straight day and entered a bear market. Treasury yields held steady.

The offshore yuan held this week’s move lower ahead of Friday’s inflation data.

Investors had largely anticipated that the Fed wouldn’t change interest rates on Thursday and were more focused on looking for any signals on the pace of policy tightening into 2019.

The central bank said “economic activity has been rising at a strong rate” and job gains “have been strong,” acknowledging a drop in the unemployment rate, while repeating its outlook for “further gradual” rate increases in its statement.

“The Fed kept with the game plan,” said Chris Rupkey, an economist in New York at MUFG Union Bank.

Elsewhere, Italian bond yields jumped after the European Union warned the nation’s budget deficit will move dangerously close to the bloc’s limit of 3%. European stocks pared an earlier advance spurred by strong earnings from companies including AstraZeneca Plc.

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