Asian markets slip ahead of FOMC meeting

Asian markets have been declining over the past three-days and it seems today won’t be any different.

The sensitivity on the potential decision ahead of the FOMC meeting means, tapering has not been entirely priced in and none of the Asian economies are immune.

Across the board, selling in the Asian ETC overnight, points to US investors opting to exit funds from the Asian markets and EMEA has had the hardest hit.

So far this month, investors have been focused on collecting evidence and speculating whether the Fed will decide to dial back on their asset purchases.

The recent US economic data painted a more positive economic picture, although, the increase in consumer spending comes from an increase of consumer credit and household net worth. The increase in consumer borrowing has become a concern for many analysts, as it shows that Americans have a false sense of security when personal income saw a dip.

Despite the uneven growth, it is clear that the markets want to see this process started. The obsession with what the impact will have on the markets has taken over the reality that a nominal reduction of $5b is unlikely to have an effect after the initial knee-jerk reaction.

In the event that the Fed yields to market expectations next week, they still have a choice of increasing or decreasing bond purchases in the future.

This brings us to the US retail sales and weekly jobless claims coming out later tonight. Auto sales are expected to drive the strong November retail sales figure of 0.6%, October retail sales was at 0.4%. The weekly claims are also expected to be on a decline.

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.