Fed, BOJ, BOE: Three-Letter Institutions Asia Stock Watchers Eye

(Bloomberg) -- With just about two weeks left to the end of the year and the focus shifting to the holidays, there’s still one big overhang investors will be watching: central-bank rate decisions.

Sure, equity trading volume was low in Asia on Monday. But it’s interest-rate galore this week, and there are three that are poised to grab market watchers’ attention: the Fed, BOJ and BOE.

Federal Reserve officials will pull the trigger on another increase this week before slowing the pace of hikes in 2019 as risks to the U.S. economy mount, according to a new Bloomberg survey of economists. Investors watching the Bank of Japan and Bank of England are expecting both institutions to stand pat. Other rate decisions expected this week will come from Thailand, Taiwan and Indonesia.

Priced In

While these decisions may have been priced into various stock markets, investors will be looking for clues on the policy path from this week’s Fed meeting and Chairman Jerome Powell’s press conference. Comments implying fewer rate increases next year could be a “boon” for equities and a “kickstart” for the much delayed December rally, said Jingyi Pan, a market strategist at IG Asia Pte.

The MSCI Asia Pacific Index gained a mere 0.3 percent as of 4:30 p.m. in Hong Kong, with Japan’s Topix index closing 0.1 percent higher. Southeast Asia had both the best- and worst-performing stock markets Monday: A rally in Singapore banks sent the Straits Times Index up as much as 1.5 percent, while Indonesia’s Jakarta Composite Index slumped 1 percent after data showed the nation’s trade deficit widened. Vietnam’s VN Index was the biggest loser on speculation foreign investors were shunning the shares just as retail investor sentiment was weak.

Setting aside monetary policy decisions, there’s China’s Central Economic Work Conference taking place this week that many will be watching, and President Xi Jinping will give a keynote speech at an event celebrating the 40th anniversary of the nation’s opening up and reform.

Stock-Market Summary

  • Japan’s Topix index up 0.1%; Nikkei 225 up 0.6%
  • Hong Kong’s Hang Seng Index little changed; Hang Seng China Enterprises little changed; Shanghai Composite up 0.2%
  • Taiwan’s Taiex index up 0.1%
  • South Korea’s Kospi index little changed; Kospi 200 up 0.3%
  • Australia’s S&P/ASX 200 up 1%; New Zealand’s S&P/NZX 50 up 0.3%
  • India’s S&P BSE Sensex Index up 0.7%; NSE Nifty 50 up 0.6%
  • Singapore’s Straits Times Index up 1%; Malaysia’s KLCI down 0.8%; Philippine Stock Exchange little changed; Jakarta Composite down 1%; Thailand’s SET down 0.6%; Vietnam’s VN Index down 1.9%

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