Central bank meetings, omicron variant, oil

Tokyo Stock Exchange in Japan.

Noriko Hayashi | Bloomberg via Getty Images

SINGAPORE – Asia-Pacific markets rose in morning trading on Monday as investors focus on a series of monetary policy meetings taking place this week.

In Japan, the Nikkei 225 rose 0.86% while the Topix index rose 0.51[ads1]%. South Korea’s Kospi increased by 0.53% and Australia’s benchmark ASX 200 rose 0.39%.

A number of high-profile central banks will hold their monetary policy meetings this week, including the US Federal Reserve, Bank of Japan, Bank of England and European Central Bank.

Accelerated Fed downsizing seems to be assured when [Federal Open Market Committee] meet this week, “ANZ Research analysts wrote in an early morning note.

They said they expect the US Federal Reserve to reduce its monthly bond purchases by $ 30 billion a month from January, compared to $ 15 billion at present.

“The Fed’s guidance on transient inflation will be dropped, and the new inflation guide is likely to reflect a clear will to act accordingly to bring inflation under control,” analysts added.

On Friday, data showed that US inflation accelerated at the fastest pace since 1982. Investors shrugged and markets responded positively to the report.

“Markets were clearly prepared for even worse news,” Ray Attrill, head of currency policy at the National Australia Bank, said in a morning note.

Attrill said that the test for the markets this week, apart from the various central bank meetings, is whether the latest developments around the new Covid strain omicron can “derail the risk sentiment.”

In the UK, the government raised the level of coronavirus threats on Sunday and warned that the rapid spread of the omicron strain was pushing the country into risky territory, the Associated Press reported. Prime Minister Boris Johnson said Britain was facing a “tidal wave” of Covid cases caused by the new variant.

Elsewhere, Israeli researchers said they found a three-shot cure with the Pfizer-BioNTech Covid-19 vaccine provided significant protection against the omicron variant, Reuters reported. The findings were similar to those presented by the above drug manufacturers.

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In the foreign exchange market, the US dollar traded almost flat against a basket of its peers. The dollar index was 96,102, slightly changed from the previous closing time of 96,097.

The Japanese yen changed hands to 113.51 per dollar, weakening from an earlier level of around 113.25, while the Australian dollar fell 0.13% to 0.7162 dollars.

Oil prices rose on Monday during Asian trading hours, with US crude oil up 1.16% to $ 72.5 a barrel.

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