* Asian markets edge up, European futures point to mixed
open
* Stocks kept in range before Fed's 2-day policy meeting
* Oil extends fall, growth woes outweigh Middle East
concerns
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Shinichi Saoshiro and Noah Sin
TOKYO/HONG KONG, June 18 (Reuters) - Most Asian stock
markets rose on Tuesday but gains were capped by investor
caution ahead of a U.S. Federal Reserve policy decision, while
crude oil prices dipped as global growth worries overshadowed
supply concerns.
European stock markets were set to open mixed, with futures
for London's FTSE FFIc1 trading flat but those for Germany's
DAX FDXc1 and the pan-region Euro Stoxx 50 futures STXEc1
down 0.2%.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS edged up 0.6%, while Japan's
Nikkei .N225 dipped 0.7%.
The Shanghai Composite Index .SSEC flitted in and out of
positive territory and was last seen up 0.1%. Hong Kong's Hang
Seng .HSI rose over 1% and Korea's KOSPI .KS11 climbed 0.4%.
Australian shares .AXJO closed up 0.6 percent at their
highest in more than 11 years as an indication of more policy
easing by the country's central bank triggered strong buying.
The Fed, facing fresh demands by U.S. President Donald Trump
to cut interest rates, begins a two-day meeting later on
Tuesday. The central bank is expected to leave borrowing costs
unchanged this time but possibly lay the groundwork for a rate
cut later this year. FED/DIARY
Hopes for looser U.S. monetary policy have been a tonic for
riskier assets, which were buffeted last month by an escalation
in the trade conflict between Washington and Beijing. The S&P
500 .SPX has gained 5% this month after sliding in May.
"In just a few months, the market has turned from being
guided by the Fed to actively guiding the Fed," wrote interest
rate strategists at Bank of America Merrill Lynch.
Markets are almost fully pricing in a 25-basis-point rate
cut for July. FEDWATCH
"The FOMC (Federal Open Market Committee) meeting is the
week's biggest event so there will be a degree of caution
prevailing in the markets," said Masahiro Ichikawa, senior
strategist at Sumitomo Mitsui DS Asset Management.
"Expectations for a rate cut in July have increased
significantly, so the markets could experience disappointment if
the Fed does not send strong signals of impending easing."
César Pérez Ruiz, chief investment officer at Pictet Wealth
Management, said in a note on Tuesday "if market expectations
for cuts are not met, we could see a jump in market volatility."
U.S. Treasury yields dipped on Monday after the New York
Fed's "Empire" gauge of business growth in the state showed a
fall this month to its weakest in more than 2-1/2-years, fanning
rate cut expectations. The dollar index .DXY against a basket of six major
currencies eased 0.1% to 97.42 after pulling back from a
two-week high on the decline in Treasury yields.
The Australian dollar AUD=D4 fell to a fresh five-month
low of $0.6830 after minutes from the Reserve Bank of
Australia's June meeting showed policymakers thought it may have
to ease again to push down unemployment and revive wages and
inflation. The central bank cut rates to a record low of 1.25% earlier
this month to support the slowing economy.
Earlier, the pound GBP=D4 extended an overnight slump and
brushed $1.2512, its lowest since Jan. 3. Concerns that
arch-Brexiteer Boris Johnson will replace Theresa May as prime
minister have dogged sterling. GBP/
The euro EUR= was a shade higher at $1.1230 after spending
the previous day confined to a narrow range.
U.S. crude oil futures CLc1 slipped 0.3% to $51.77 per
barrel after retreating 1.1% the previous day. Brent crude
LCOc1 was down a similar amount at $60.76, following Monday's
loss of 1.7%.
Oil prices had fallen on Monday as weak Chinese economic
data last week led to fears of lower global demand for the
commodity. O/R
Concerns over weakening demand overshadowed tensions in the
Middle East, which remained high following last week's attacks
on two oil tankers in the Gulf of Oman.
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Wall Street asks when, not if, the Fed will cut rates https://tmsnrt.rs/2IpbACq
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(Editing by Sam Holmes and Kim Coghill)