Asian Equities Drift Lower

An index of Asian shares and the dollar both edged down on Wednesday, as investors grew cautious ahead of central bank meetings and U.S. data later in the week.  MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down about 0.1 percent in early trade, while Japan’s Nikkei stock average .N225 fell 0.8 percent.  On Wall Street overnight, U.S. stock indexes retreated from record highs hit earlier in the week.

The euro inched up against the dollar to $1.1180 EUR=, a day ahead of a European Central Bank meeting, at which policymakers are expected to announce additional details about the bank’s 1.1 trillion euro ($1.23 trillion) bond-buying quantitative easing program. Some believe the forex impact is likely to be limited.  “We don’t see a large chance of a negative EUR move as the total amount of QE is already known, and unlikely to be altered. A positive EUR impact is also unlikely to be sustained,” Richard Cochinos, a strategist at CitiFX, wrote in a note to clients.

The ECB will also release new economic forecasts. Chief Economist Peter Praet said last week that it was likely to revise upward its expectations for growth in the euro zone, against a backdrop of low oil prices and a weak euro.  Some investors were reluctant to make big bets before Friday’s U.S. nonfarm payrolls report for February, which could indicates the strength of labor conditions and could add to speculation about the timing of the U.S. Federal Reserve’s interest rate hike.

Reuters

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