CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

ASX 200 and beyond: 3 key insights from Wednesday, March 17

The ASX 200 finishes out the session lower as markets wait for the Fed’s view on economy, rates and yields.

  • 'The ASX 200 endures a broad-based sell-off led by cyclicals
  • Asian stock markets drop as traders position for the Fed
  • Markets wait for Fed’s view on economy, rates and yields

ASX 200 drops, Asian stocks trade mixed

The ASX 200 was a major laggard in the Asian region on Wednesday, March 17, closing down 31.9 points or 0.47%, at the 6,795 level. The day’s trade was exemplified by the broad-based play out of risk assets: by the late afternoon, 8 of 11 sectors were trading in negative territory, with energy and materials stocks the major laggards.

Things didn’t change much at the market close, with 6 out of 11 sectors finishing out the day in the red.

The rebound in tech-stocks has continued, with the IT sector the market’s leader for the day, with the market getting some support from strength in the telcos. The All Technology index finished out the day 0.45% lower, at 2,722 points.

Collins Foods, Unibail-Rodamco-Westfield, and Clinuvel were the best performing ASX-listed equities during Wednesday's session, while Corporate Travel Management, Inghams Group and Omni Bridgeway were the worst performing.

Elsewhere, Asian markets endured a generally soggy day’s trade, with stocks trading mixed, as market participants gear-up for the conclusion of the US Federal Reserve’s policy meeting. Volatility has been reasonably subdued. But price action does wreak of de-risking ahead of what’s shaping as a potentially high volatility event.

The battle between growth and value has stalled as US Treasury yields held near their 1-year highs, with both sides heading to their corners for a breather as the markets await cues from the Fed for what to do next.

AUD/USD remains range bound

In broader markets, and price action has been lacklustre, especially in the FX world, which is being driven by indecision about the US Dollar ahead of tonight’s US Fed meeting. The US Dollar Index is trading 0.1 per cent higher at time of writing, mostly courtesy to a drop in the Euro and a steadiness in the Yen. While the AUD/USD remains stubbornly range bound and floating around the mid-0.7700 handle.

You can trade indices and currencies long and short with IG today. Create an IG trading account or log in to your existing account to get started now.

What is the Fed to do?

As far as tonight’s Fed meeting goes, for all the anticipation about this particular meeting, the central bank is almost certain not to adjust policy. However, that fact doesn’t diminish its importance, with several key issues to drive the market reaction from it. Those are:

  • Economic forecasts: the Fed is expected to upgraded its outlook for the US economy, in sympathy with upgrades already made amongst the analyst community, and will reflect a recent run of decent economic data, as well as the passage of US President Joe Biden’s latest stimulus package.
  • The Dot Plots: coupled with the new economic forecasts will be the Fed’s latest estimates for the path of the Federal Funds rate. Although recent Fed commentary has focused on the need to keep rates low for some time, interest rate markets are pricing in a high chance of a Fed hike by late-2022 – the markets will be watching to see if any Fed members may be sympathetic to this idea.
  • Inflation and bond yields: concern has grown in the markets that higher inflationary pressures will push bond yields materially higher, potentially depressing financial conditions and undermining equity valuations. Market participants will be assessing the Fed’s views on the inflation outlook, and gauging what appetite the Fed may have in leading on yields, if necessary.

It’s quite likely the Fed will look to take a neutral line at this meeting, consistent with its recent messaging that it sees little need to remove policy support as it remains focused on supporting the economic recovery – even if that recovering is looking stronger than previously forecast.

There’s the chance the markets may be left high and dry on the question of controlling rates at the long-end – which may prove the source of volatility around this Fed meeting. Afterall, with stocks at record highs and financial conditions still supportive, there’s little immediate impetus for the Fed to waste ammunition on a pain point that’s not yet been met.

Looking to how overseas markets ought to open within the current backdrop, and our prices are pointing to a mixed night’s trade. European indices are looking generally mixed, if not slightly skewed to the upside, while US indices are looking at a flat open.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.