Investors will be keeping a close watch on the US central bank as policymakers have to deal with the fallout from hurricanes Harvey and Irma, which hammered the country and are expected to hit economic growth.
While it is tipped to keep borrowing costs on hold, the bank’s plans for cutting back crisis-era bond-buying stimulus and any signals for the future of interest rates will be pored over.
However, analysts were unsure about any further increases this year with inflation remaining subdued — apart from a bigger-than-expected jump in August — and other indicators still soft.
Despite the likely move to tightening, stock markets remain buoyant and on Friday the Dow and S&P 500 each closed at all-time highs.
In Asia, on Monday Hong Kong rose one percent, Shanghai 0.5 percent higher and Sydney rallying 0.6 percent. Singapore added more than one percent, with Wellington 0.2 percent higher and Taipei climbing 0.4 percent.
Japanese markets are closed for a public holiday.
“Ultimately draining the economy of cheap money can’t be viewed as a positive for markets accustomed to feeding off central bank largess. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.