Asian shares look set to slip after Fed raises rates and signals more hikes ahead

Asian markets were poised to decline on Thursday after the Federal Reserve raised interest rates, a widely expected move, and indicated two more rate hikes were likely in 2018.

U.S. stocks ended lower after the Fed raised interest rates: The Dow Jones industrial average declined 0.47 percent, or 119.53 points, to close at 25,201.20, the S&P 500 slipped 0.4 percent to 2,775.63 and the Nasdaq composite finished the session lower by 0.11 percent at 7,695.70.

The Federal Reserve raised rates by 25 basis points and signaled two additional rate hikes later in the year. Wednesday’s interest rate hike pushed up the funds rate target to 1.75 percent to 2 percent. The central bank’s first rate hike this year took place in March.

U.S. Treasury yields rose on the back of that move, with the yield on the benchmark 10-year note crossing the 3 percent level, before later receding a bit. The two-year Treasury note yield, meanwhile, hit its highest level since 2008 in the last session.

The dollar index, which tracks the greenback against a basket of currencies, rose as high as 94.028 on Wednesday, before easing slightly to last stand at 93.546.

Trade tensions, which had recently yielded some of the spotlight to nuclear negotiations, could return to the fore. U.S. President Donald Trump is expected to meet with members of his administration to make a decision on whether or not to activate billions in tariffs on Chinese imports, Reuters reported, citing a source.

Here’s the economic calendar for Thursday (all times in HK/SIN):

  • 9:30 a.m.: Australia employment data
  • 10:00 a.m.: China fixed asset investment, industrial production and retail sales

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