Morning Briefing: Fed in focus, markets mixed

Fed in focus, markets mixed... President Trump would be bad news for Asia says bank...

Steve Randall
Fed in focus, markets mixed
The Fed begins its July meeting Tuesday and markets are anticipating its latest assessment of the US economy although a change in interest rates is largely dismissed by analysts. Expectation for a hike in September is also softer than it was with some analysts now eyeing 2017 for any increases.

The Bank of Japan also meets this week and there could be a disappointment for markets following recent speculation of a sharp rise in stimulus for the economy. Latest reports suggest that the package will be in the region of 6 trillion yen (U$56.7 billion) which is larger than initially forecast but below the 10 to 20 trillion yen range that has been talked about in media reports.

Asian indexes closed mostly higher although Tokyo’s Nikkei was off by almost 1.5 per cent.

European markets are mixed on regional earnings, the Fed and declining oil prices. London’s FTSE has gained as the pound falls again.

Wall Street and Toronto are expected to open slightly higher.
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North America (previous session)
US Dow Jones 18,493.06 (-0.42 per cent) +6.28 per cent +5.26 per cent
TSX Composite 14,498.10 (-0.70 per cent) +4.36 per cent +2.20 per cent
Europe (at 4.30am ET)
UK FTSE 6,719.96 (+0.15 per cent) +9.47 per cent +2.13 per cent
German DAX 10,169.77 (-0.28 per cent) +6.41 per cent -10.38 per cent
Asia (at close)
China CSI 300 3,269.59 (+1.20 per cent) +6.25 per cent -21.71 per cent
Japan Nikkei 16,383.04 (-1.43 per cent) +9.57 per cent -20.26 per cent
Other Data (at 4.30am ET)
Oil (Brent) Oil (WTI) Gold Can. Dollar
(-0.72 per cent)
(-1.00 per cent)
(+0.09 per cent)
Aus. Dollar

President Trump would be bad news for Asia says bank
Japanese investment bank Nomura says that if Donald trump were to become US President it would be as bad for Asia as for Mexico.

"A Trump presidency would no doubt hurt Asia's gross domestic product (GDP) growth and could ultimately drive cost-push inflation, impart smaller trade surpluses and looser macroeconomic policies,” the bank told CNBC.

The countries that would suffer most are South Korea and the Philippines while India and Thailand would be less impacted.

Nomura points to Trump’s lack of a track record as a policymaker making it hard to predict what he might do and creating uncertainty for the markets.