· Asian shares fell on Wednesday to a six-week trough, rattled by fresh trade war concerns following threats from President Donald Trump to Beijing, while increasing worries about a no-deal Brexit kept the pound under pressure.
Later in the day, the U.S. Federal Reserve is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago. The expected easing has supported risk asset prices worldwide.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS pared losses to trade down 0.5% but earlier fell to the lowest since June 19, while Japan's Nikkei .N225 declined by 0.7%.
“We expect the Fed to cut rates by 25 basis points and keep the door open to further rate cuts, which should be sufficient to keep markets satisfied,” said Mayank Mishra, a macro strategist at Standard Chartered Bank in Singapore.
· China stock market ended down on Wednesday after U.S. President Donald Trump issued fresh threats to China, and as developers dropped on a less supportive policy tone from Beijing.
The Shanghai Composite index closed 0.7% weaker at 2,932.51 points, ending the month down 1.6%. The blue-chip CSI300 index ended down 0.9% on Wednesday, but edged up 0.3% month-on-month.
· Japanese shares slid on Wednesday, hurt by U.S. President Donald Trump’s warning to China not to drag out trade talks while some disappointing earnings hit automotive parts suppliers and banks.
The Nikkei share average fell 0.86% to 21,521.53 as investors cautiously awaited the U.S. Federal Reserve’s policy decision later in the day.
For the month of July, the benchmark eked out a 1.2% gain.
As a new round of U.S.-China trade negotiations started in Shanghai, Trump warned China against waiting out his current presidential term before finalising a trade deal.
· U.S. stock index futures were higher Wednesday morning, as market participants braced for the outcome of the Federal Reserve’s meeting later in the session.
At around 02:35 a.m. ET, Dow futures rose 56 points, indicating a positive open of more than 52 points. Futures on the S&P and Nasdaq were both slightly higher.
The U.S. central bank is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago. Market expectations point to a quarter-point rate cut.
The Fed is set to deliver its decision at 2:00 p.m. ET, with Chairman Jerome Powell scheduled to hold a press conference at 2:30 p.m. ET.
The projected move from the Fed has supported risk asset prices worldwide in recent days. However, trade war concerns have resurfaced to cap gains.
· European stocks opened slightly lower on Wednesday as investors await an interest rate decision from the U.S. Federal Reserve.
The pan-European Stoxx 600 slipped by around 0.1% shortly after the bell, with the media and utilities sectors falling 0.8% while oil and gas stocks jumped out to 0.7% gains.
Reference: CNBC
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