CTAs keep buying Treasuries, gold longs face stop-loss risk: BofA
* MSCI AxJ index up 0.3%, Nikkei +0.1%
* Currencies becalmed, yen firm
* Fed statement due 1800 GMT
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and Chibuike Oguh
SINGAPORE/NEW YORK, June 10 (Reuters) - Asian stock markets
eked out a 10th consecutive session of gains on Wednesday, but
momentum ebbed as doubts about the global recovery from the
pandemic returned ahead of the U.S. Federal Reserve meeting.
The sideways moves in equities cap two weeks of stock market
gains, turbocharged by Friday's data showing a completely
unexpected rise in U.S. employment last month. Safe havens from
gold to the Japanese yen won support as optimism ebbed.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.3% and Japan's Nikkei .N225 rose 0.1%.
The yen JPY= held on to two days of big gains and commodity
currencies nursed Tuesday's losses. Gold XAU= rose slightly.
Focus has switched to the Fed's economic outlook and whether
a steepening of the U.S. yield curve during last week's bond
market selloff might prompt intervention at longer tenors.
"The Fed tonight is a key variable in determining whether
this is a pit-stop or U-turn," said Vishnu Varathan, head of
economics and strategy at Mizuho Bank in Singapore.
No action is expected from the Fed, but any hit of taking
the foot off the pedal could hammer risk sentiment and lift the
dollar.
The Fed's economic projections, guidance as to how long and
how low rates can be held down and the prospect of yield-curve
control will be closely watched, Varathan said in a note.
A statement from the Fed is due at 1800 GMT followed by a
news conference half an hour later and markets seem to be idling
ahead of that. S&P 500 futures ESc1 rose 0.6% to recoup some
of Tuesday's losses, but other moves were smaller.
Benchmark stock indexes in Australia .AXJO , Hong Kong
.HSI and South Korea .KS11 rose less than 0.3%. Benchmark
U.S. 10-year yields US10YT=RR were steady at 0.8287%, 13 basis
points below a Friday peak of 0.9590%. US/
GREAT EXPECTATIONS
The Fed meeting takes place amid near-euphoric investor
optimism about a swift recovery from the COVID-19 pandemic but,
last week's U.S. jobs report aside, economic signals and rising
Sino-U.S. tensions paint a dire picture.
After weeks of ignoring woeful data, the prospect of a slow
recovery now seems to be weighing on investors minds and feeding
into growing expectations for the Fed to do even more.
China's May factory gate prices fell by the sharpest annual
rate in more than four years, data showed on Wednesday, a sign
the pandemic is dragging on global demand. Overnight, data showed German exports and imports in April
posted their biggest declines since records began in 1990. The
country is facing its deepest recession since World War Two.
"We expect the Fed will do more especially when the
'unprecedented' 2Q20 comes to pass, including expanding its
various lending programmes and even dabble into yield curve
control," analysts at Singapore UOB Bank said on Wednesday.
Currency markets were largely becalmed ahead of the meeting,
with risk-sensitive Australian and New Zealand dollars steady
after being repelled from multi-month peaks they hit early on
Tuesday. FRX/
The Aussie AUD=D3 last sat at $0.6969, about 1% below an
11-month high $0.7043 hit a day earlier, while the kiwi NZD=D3
was steady at $0.6522. The yen JPY= held near a week-high at
107.67 per dollar, reflecting caution.
Gold was firm at $1,716.29 per ounce. GOL/
Oil prices were on the back foot on renewed concerns about
oversupply and underlying economic weakness. Brent crude LCOc1
was last down 1% for the session at $40.72 per barrel and U.S
crude CLc1 was 1.4% weaker at $38.38 a barrel. O/R
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Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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