GLOBAL MARKETS-Asian stocks seesaw as traders hold breath before Fed meeting

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Equities lack trend as earnings roll in
* Some analysts say stock valuations already high
* Fed expected to stay course but outlook is improving

By Stanley White
TOKYO, April 28 (Reuters) - Asian shares struggled to make
firm gains on Wednesday as already high valuations discouraged
investors from buying equities ahead of a closely-watched U.S.
Federal Reserve meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS declined 0.12%. Australian stocks .AXJO rose
0.47%, but shares in China .CSI300 slipped 0.06%. South Korean
stocks .KS11 fell 0.99%. Stocks in Tokyo .N225 edged 0.46%
higher.
S&P 500 e-mini stock futures EScv1 rose 0.14%.
Euro Stoxx 50 futures STXEc1 were up 0.25%, German DAX
futures FDXc1 up 0.16%, FTSE futures FFIc1 up 0.31%,
pointing to a positive start to European trading.
Fed Chairman Jerome Powell is expected later on Wednesday to
reaffirm that easy monetary policy will remain in place for a
prolonged period and dismiss any suggestions of tapering bond
purchases. U.S. President Joe Biden will also address a joint session
of Congress, where he may make additional comments about
infrastructure and stimulus spending. These developments would normally be a positive for stocks,
but analysts say so much economic optimism is already priced
into the equity market that it is difficult to buy stocks
further from current levels.
"We expect the Fed's tone on the economy to be more positive
than at the March FOMC meeting, reflecting the ongoing pickup in
the data, but we don't expect any substantive new signal yet on
tapering," analysts at TD Securities wrote in a research note.
"While we do not expect much price action due to the Fed
decision, Biden's remarks could continue to suggest more
incoming supply, bear steepening the (Treasury yield) curve."
The Dow Jones Industrial Average .DJI rose 0.01%, but the
S&P 500 .SPX lost 0.02%, and the Nasdaq Composite .IXIC
dropped 0.34% as investors digested a mixed bag of earnings from
Tesla Inc TSLA.O , 3M Co MMM.N , Microsoft Corp MSFT.O , and
Google-parent Alphabet GOOGL.O overnight.
Some investors were also reluctant to move before earnings
from heavyweights Apple Inc AAPL.O , Facebook Inc FB.O , and
Amazon.com Inc AMZN.O due later this week.
An improving U.S. economy, rising coronavirus vaccination
rates, and expectations for big fiscal spending are causing more
investors to question when the Fed will start slowing its bond
purchases and how much inflation policymakers will tolerate.
Breakeven rates on 10-year Treasury Inflation-Protected
Securities US10YTIP=RR , a measure of expected annual inflation
for the coming decade, rose to 2.41%, the highest since 2013.
Yields on benchmark 10-year Treasuries US10YT=RR reached a
two-week high of 1.6430%.
The dollar edged up slightly against the yen JPY= and the
British pound GBP=D3 , but trading is expected to be subdued
until Powell speaks after the Fed meeting.
The Australian dollar AUD=D3 was knocked lower after
disappointing data on consumer prices. In the cryptocurrency market, Ether ETH=BTSP pulled back
slightly from an all-time high above $2,700 reached after
Bloomberg reported that the European Investment Bank plans to
sell a two-year digital bond worth 100 million euros ($120.80
million) on the ethereum blockchain network. Rival cryptocurrency Bitcoin BTC=BTSP edged lower to
$55,618.
In commodities, Brent crude LCOc1 futures fell 0.03% to
$66.40 a barrel while U.S. West Texas Intermediate crude CLc1
lost 0.03% to $62.92 per barrel due to worries about energy
demand.
Benchmark copper CMCU3 fell from a decade high of $9,965 a
tonne hit on Tuesday due to concerns about softening demand in
China, the world's top consumer of the metal.
Gold XAU= , which is often seen as a hedge against
inflation, fell 0.28% to $1,771.70 in cautious trade ahead of
the Fed meeting.
($1 = 0.8278 euros)

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