Australian shares are poised to dip at the open on Monday with buyers hesitant in a week of heavy central bank moves, including the US Federal Reserve.
Bets have increased that the Federal Reserve could deliver its single biggest rate rise since 1981, although Westpac economists say such an increase would be “unnecessary and potentially risky”.
“Indeed, the market is pricing some chance of a 100 basis point increase. To us, at this point in the cycle and with real term interest rates around plus 1 per cent, a 100 basis point increase is unnecessary and potentially risky.”ASX futures were down 2 points to 6737. Futures pared earlier losses as dip buyers emerged late in New York, helping to trim losses on their final session of last week.
Economists anticipate US interest rates will reach 4 per cent by December and stay high throughout 2023, reflecting the tougher inflationary environment after the August core CPI growth came in hot. Policymakers will also gather at the Bank of England, Bank of Japan and Swiss National Bank this week. The BoE is expected to raise rates 50 basis points in a shortened week for the funeral of Queen Elizabeth II, although there is a risk of 75 basis points.
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