Economy

Fed sets plans to reduce balance sheet after nine years of buildup

Stocks in Southeast Asia were mixed. Banks benefit from higher bond yields because it means they can charge higher interest rates on loans.

"The announcement was pretty much in line with what was expected", said David Chalupnik, head of equities at Nuveen Asset Management. "I will say that I have not had a further meeting with President Trump". And next year, it's forecasting growth of 1.9 per cent for the eurozone, 0.1 percentage point more than previously thought, but below its 2.4 per cent projection for the U.S. The big three eurozone economies - Germany, France and Italy - all saw upward revisions.

The pan-European FTSEurofirst 300 index rose 0.08 percent and MSCI's gauge of stocks across the globe gained 0.15 percent. The Nasdaq composite lost 0.1 percent to 6,456.04. Shares of smaller wireless carrier T-Mobile rose 5.9 percent and Sprint jumped 6.8 percent, following a report they were in active merger talks.The healthcare index .spxhc was one of the biggest laggards, with declines in insurers such as United Health, which fell 1.8 percent due to the latest efforts in Washington to overhaul Obamacare.Best Buy fell 8 percent after the No. 1 USA electronics retailer forecast fiscal 2021 adjusted earnings well below Wall Street estimates.

Markets elsewhere were mixed on Wednesday.

At the close in Sydney, S&P/ASX 200 edged higher by 0.4 percent to A$5,720.60, while the S&P/ASX 200 VIX increased by 0.8 percent to A$12.532. The FTSE 100 index of leading British shares was stable at 7,272. The yen also eased against the euro and the Australian dollar during Tuesdays Asian session, trading at 133.70 yen and 89.00 AUD.

WALL STREET: Major U.S. benchmarks finished mostly higher. Many expect the central bank to announce Wednesday that it will keep rates unchanged and that it will start slowly unwinding its $4.5 trillion balance sheet. As the bonds mature, the government pays the face value to the Fed. However, the important bit will be whether they maintain their commitment to more gradual rate rises. With Hurricanes Harvey and Irma clouding some economic data - temporarily raising gas prices, likely restraining hiring and potentially depressing growth - some analysts assumed the Fed wouldn't have enough information by December to assess whether the economy had rebounded.

"The market remains extremely strong", said Adam Sarhan, chief executive of 50 Park. It also lowered again its estimated long-term "neutral" interest rate from 3.0 percent to 2.75 percent, reflecting concerns about overall economic vitality. Benchmark 10-year notes last fell 2/32 in price to yield 2.2375 percent, from 2.23 percent late on Monday.

Industrial companies, including airlines, led the gainers Wednesday.

There were no dissents in the Fed's policy decision.

Dollar bulls welcomed the statement and pushed the United States currency higher.

In other economic news, data from Statistics New Zealand showed that New Zealand posted a seasonally adjusted current account deficit of NZ$1.598 billion in the second quarter of 2017. Policymakers have been divided in recent months on the near-term threat of inflation. The report from the National Association of Realtors pulled down home builder shares.

Energy stocks also rose as oil prices headed higher.

Platinum rose 0.7 percent to Dollars 954.60 an ounce, after hitting its lowest since early August in the previous session. Brent crude, used to price worldwide oils, gained US$1.15, or 2.1 per cent, to $56.29 a barrel in London. Silver rose 6 cents to US$17.33 an ounce.



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