But the driving forces for markets will likely be global.
Traders are putting a 95% probability on the Fed standing pat on Wednesday, a consensus so strong the Fed will almost certainly respect. The focus for investors will be on the statement and Fed Chair Jerome Powell’s press conference for signs on whether it will be a ‘hawkish’ or ‘dovish’ pause.
All of that will come after Asian markets close, so in the meantime local investors will take their cue from yet another remarkable performance on Wall Street, especially tech stocks and the Nasdaq.
The NYSE FANG+ index of mega tech stocks rose 0.9% for a fourth consecutive daily rise, bringing its year-to-date gains to 72%. The index has posted only four declines in the past 21 trading sessions.
Even beleaguered Chinese tech stocks are finally feeling the glow – the Hang Seng tech index is up 11% so far this month, outperforming the broader Hang Seng (up 7%) and significantly outpacing the main Chinese indices, which are up 1% or 2%.
The MSCI Asia ex-Japan index rose more than 1% on Tuesday, its second best day since March, while Japan’s Nikkei hit a fresh 33-year high above 33,000 points.
Momentum across all these markets is coming from strong technical, positioning and ‘fear of missing out’ tailwinds. One major headwind, particularly for Asian assets, could be the surge in U.S. Treasury yields, although that for now at least is being mitigated by the dollar’s slide to a three week low.
