Asian equities are directionless as the Fed downplays its early rate cuts

Following a lacklustre lead-in from Wall Street, Asian stocks performed poorly on Thursday as the Federal Reserve downplayed expectations for interest rate reduction as early as March 2024.

The Bank of Japan's hawkish signals contributed to the decline in Japanese markets as well. According to a recent assessment of the BOJ's views, officials have talked about perhaps removing the bank's ultra-dovish stance in the near future.

Powell pointed out that the US economy was still strong and refrained from declaring triumph over inflation. Markets are already setting up for a rate cut in May as a result of betting that the Fed will only postpone its rate lowering by a few months.

In order to make up for a delay in the rate cuts, some analysts suggested that the Fed would lower rates by a greater amount later this year.

Asian stock markets have been closely monitoring the Fed's plans to reduce interest rates because it is anticipated that these moves will have a significant impact on the volume of capital flows to the region in the upcoming months.

On the economic calendar today:

• PMIs from the UK, Eurozone and US are due throughout the day
• Eurozone CPI
• Bank of England interest rate decision
• US Initial Jobless Claims

(Sources: investing.com, reuters.com)