HONG KONG, Nov 1 ― Asian shares rose and bond yields firmed in early trade day despite mild losses from Wall Street overnight as investors turned their focus to the Federal Reserve's policy meeting this week for hints on what comes next.
The central bank is all but certain to raise interest rates by 75 basis points tomorrow, but investors will look for any signals the Fed may be considering a deceleration in interest rate hikes in the future.
Apart from the Fed's rate decision, the market will also focus on US jobs data on Friday, Chinese economic activity data this week and the Reserve Bank of Australia's Tuesday meeting.
“It was a mixed start for risk assets as a big week of central bank decisions gets underway,” said ANZ analysts in a note.
Early in the Asian trading day, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7 per cent. US stock futures rose 0.2 per cent.
Australian shares were up 0.65 per cent with the mining index leading the gains, while Japan's Nikkei stock index rose 0.95 per cent.
China's blue-chip CSI300 index was 0.51 per cent higher in early trade. Hong Kong's Hang Seng index opened up 1.52 per cent.
Yesterday, US stocks lost ground with the major indexes closing out a strong month of gains on a weaker foot. The Dow Jones Industrial Average fell 0.39 per cent, the S&P 500 lost 0.75 per cent and the Nasdaq Composite dropped 1.03 per cent.
Hopes the Fed may pull back from its aggressive interest rate hike policy have lifted US equities last month with the Dow jumping 13.95 per cent, the S&P climbing 7.99 per cent and the Nasdaq advancing 3.9 per cent.
The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 4.4803 per cent compared with a US close of 4.501 per cent yesterday. The yield on benchmark 10-year Treasury notes stood at 4.0478 per cent compared with its US close of 4.077 per cent.
In currencies, the dollar was firm against the struggling Japanese yen to ¥148.69 and rose to US$0.98905 per euro early in the Asia session.
Yesterday, Japan's finance ministry said it spent a record US$42.8 billion on currency intervention last month to prop up the yen.
In the energy market, oil prices fell as investors expected US production could increase. US crude CLc1 dipped 0.59 per cent to US$86.02 a barrel. Brent crude fell to US$92.41 per barrel.
Gold was slightly higher. Spot gold was traded at US$1633.35 per ounce. ― Reuters
