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Asian shares fell as investors braced for a week full of central bankers

A woman walks past a screen displaying the Hong Kong Index in the Central District in Hong Kong, China on March 21, 2023. REUTERS/Tyrone Siu/File Photo Get license rights

  • Asian stock markets:
  • Fed rate decision on Wednesday, BOE on Thursday, BOJ on Friday
  • US crude hits new 10-month dollar high
  • China slumped to 25% before Evergrande regained ground

SYDNEY, Sept 18 (Reuters) – Asian shares fell on Monday and the dollar was firmer as investors looked ahead to policy meetings this week by the Federal Reserve, the Bank of Japan and other central banks.

Europe is set for a modest open with EUROSTOXX 50 futures off 0.1%. S&P 500 futures advanced 0.2%, while Nasdaq futures rose 0.1%.

Oil prices hit fresh 10-month highs, fueling inflationary pressures further. US West Texas Intermediate crude futures rose 0.8% to $91.52, their highest level since November, while Brent crude futures rose 0.7% to $94.55 a barrel.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.7%. Japan’s Nikkei (.N225) is closed for a public holiday.

Technology stocks retreated in the region, with Taiwan’s TSMC ( 2330.TW ), the world’s top contract chipmaker, falling 3% after Reuters said it had delayed deliveries of high-end chipmaking equipment to its key suppliers.

In China, better-than-expected factory output and retail sales in the world’s second-largest economy helped Chinese bluechips ( .CSI300 ), which rose 0.4%.

But property sector woes sent Hong Kong’s Hang Seng (.HSI) down 1%.

Zhongrong International Trust, which exposes Chinese property developers, said over the weekend that some trust products were unable to make timely payments.

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“Despite the encouraging sign of stabilization, the property market continues to be the missing puzzle piece in the economic picture,” said Tommy Xie, head of Greater China Research at OCBC Bank.

“On-the-ground feedback indicates an uptick in property viewing activity; however, most prospective buyers are not in a rush to close deals as flats are on the rise post-relaxation.”

Shares in China Evergrande Group ( 3333.HK ) fell as much as 25%. Police in southern China detained some employees at its wealth management unit, but they have since cut losses by 1.6%.

This week, global central banks will take center stage as the five overseeing the 10 most-traded currencies hold rate-setting meetings. Meetings of emerging market central banks will also be held.

Markets have fully priced in a second straight pause from the central bank on Wednesday, which is expected to keep its target range unchanged at 5.25% to 5.5%, so the focus will be on updated economic and rate forecasts. They see an 80 basis point cut next year.

“In theory, the FOMC meeting should be a less volatile affair, but this is a risk that needs to be managed,” said Chris Weston, head of research at Pepperstone.

Weston added that if the Fed revises its rate forecasts for 2024, rate cuts will be priced in, resulting in renewed interest in the U.S. dollar and easing pressure on global equities.

On Thursday, the Bank of England will raise benchmark borrowing costs to 5.5% for the 15th time.

The Bank of Japan was the main risk event on Friday. After recent comments from Governor Kazuo Ueda, markets are looking for signs that the BOJ will rapidly move away from its ultra-loose policy.

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Last Friday, Wall Street fell sharply as US industrial labor action weighed on auto stocks. Rising Treasury yields pressured Amazon ( AMZN.O ) and other megacap growth companies.

Cash Treasuries were not traded in Asia after the Tokyo close. Treasury yields rose on Friday, above the 5% threshold in two years.

In currency markets, the US dollar was near its six-month high at 105.25 against a basket of major currencies.

The euro rose 0.1% to $1.0667, after falling to a 3-1/2-month low of $1.0632 last week, after the European Central Bank signaled an end to its rate hikes.

Gold rose 0.2% to $1,928.13 an ounce.

Report by Stella Qiu; Editing by Sri Navaratnam and Edwina Gibbs

Our Standards: Thomson Reuters Trust Principles.

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