Three central bank meetings will likely top the agenda for Asian markets this week, with particular focus on the U.S. Federal Reserve. On Wednesday, the Federal Open Market Committee ends its two-day review and traders are bracing for an increasingly hawkish tone from Fed Chair Janet Yellen.
Last week, global equity and currency markets came under pressure on speculation that the central bank could remove language about keeping rates low for a “considerable time”. Strategists say if that were to happen, it would start the countdown for the Fed’s first rate hike.
Emerging markets will pay close attention as potential tightening moves could spark another round of capital outflows, similar to 2013’s “taper tantrum.” Back in Asia, Malaysia’s central bank is expected to hold fire at Thursday’s policy meeting after hiking rates in July for the first time since 2011.
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