Stock Groups

Fed tapering, oil prices, interest rates


Workers wearing masks are seen working in the trading area at Daiwa Securities Group Inc.’s Tokyo headquarters on Thursday, October 14, 2021.

Bloomberg via Getty Images| Bloomberg via Getty Images

SINGAPORE — Asia-Pacific markets were set to trade cautiously as investors digest the U.S. Federal Reserve’s indications that its run of ultra-easy monetary policy since the start of the pandemic is coming to a close.

Earlier trade in Australia was relatively quiet. This benchmark ASX 200It fell by 0.05% because of struggles in energy and material sectors to gain.

Futures pointed also to an open higher in Japan. Nikkei 225The previous session saw a 0.1% decrease.

The session for Thursday in Asia is as follows overnight gains on Wall Street.

CNBC Pro: Find stock picks and trends in investing from CNBC Pro

Stateside, the Fed said it will accelerate the reduction of its monthly bond purchases — the central bank will be buying $60 billion per month of bonds starting in January, down from December’s rate of $90 billion, and said that it will likely continue that trajectory in the months ahead.

The central bank will begin increasing interest rates once that is done. Fed officials have released projections that show three rate increases in 2022. Two more are expected in 2023. There will be two additional in 2024.

Tapas Strickland from the National Australia Bank’s director of economics, stated that the market had “seem to have taken the tilt in its stride” given the three hikes close to being price into the meeting. He also said that expectations were high for an acceleration in taper profiles.

He said that one gets the impression that Fed could act as soon as March 2022. However, the Omicron variation is one of the key uncertainties. The taper profile plays to the belief that first rate rise will be in May 2022.

Oil and Currencies

The currency market is dominated by the U.S. dollarLast traded at 96.511 against its peers.

The Japanese yenThe dollar fell to 114.15 from levels close to 113.70 during the previous week. The Australian dollarThe exchange rate was $0.7170. It remained fairly flat.

Oil prices moved up on Thursday, during Asian trading hours. U.S. crude was at $71.62 per barrel.

This report was contributed by Jeff Cox, CNBC.