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Asian Stocks Down, Focus on China Evergrande Debt Crisis and Fed Policy Decision

Stock MarketsSep 20, 2021 11:40
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By Gina Lee

Investing.com – Asia Pacific stocks were down on Monday morning, with the focus on China Evergrande Group's (HK:3333) continuing debt crisis and the latest policy decision from the U.S. Federal Reserve.

Hong Kong’s Hang Seng Index slid 1.96% by 9:32 PM ET (1:32 AM GMT) and in Australia, the ASX 200 fell 1.30%.

Chinese, Japanese and Korean markets were closed on Monday.

U.S. ten-year Treasury yields climbed as the Fed prepares to hand down its policy decision on Wednesday. Cash Treasuries will not trade on Monday in Asia due to the holiday in Japan.

Investors are holding their breath ahead of China Evergrande’s bond interest payment, due on Thursday. The offshore yuan steadied.

They also await the Fed policy decision, due to be handed down on Wednesday, for more clues on the central bank’s asset tapering timeline.

“It’s really going to be tied to when and how quickly tapering comes,” Knights of Columbus Asset Advisors President and Chief Investment Officer Tony Minopoli told Bloomberg.

“We don’t think the Fed’s really going to be able to telegraph that too much. We have inflation building in the system, wages are rising, supply chains firmly driving prices, and with so many central banks having to make rate decisions we think it’s a bit jittery,” he added.

Fed Chairman Jerome Powell, Governor Michelle Bowman and Vice Chairman Richard Clarida will discuss economic recovery from COVID-19 on Friday.

Other central banks handing down policy decisions throughout the week include the Bank of Japan and the Bank of England, whose Wednesday and Thursday respectively.

Back in the U.S., Treasury Secretary Janet Yellen warned that the U.S. government will run out of money to pay its bills around October time without action on the debt ceiling. She also called on lawmakers to take the necessary steps to avert an “economic catastrophe”. Uncertainty also remains over U.S. President Joe Biden’s $4 trillion economic agenda.

Meanwhile, the focus will also be on iron ore after it fell below $100 a metric ton for the first time in more than a year. Voters will also cast their ballots later in the day in the Canadian federal elections later in the day.

Asian Stocks Down, Focus on China Evergrande Debt Crisis and Fed Policy Decision
 

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