ASX set to fall on Fed stance

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Australian shares are expected to open sharply lower after the US Federal Reserve foreshadowed plans to wind back its bond-buying program if the recovery stayed on track.

On the ASX24, the SPI futures contract was 58 points lower to 4778. The Aussie dollar is sharply lower after Ben Bernanke statements, losing more than 2.5 US cents. It was recently buying 93.02 US cents, down from 95.5 US cents before the Fed comments. It touched 92.9 US cents. The Aussie was also buying 89,68 yen, 70 euro cents and 60.1 British pence.

After a two day policy meeting, Fed Chairman Ben Bernanke said that if growth continues to pick up pace the Fed could begin reeling in its $US85 billion-a-month in bond purchases sometime later this year, and bring the operation to a close by mid-year 2014.

“Bottom line – no backing down, no turning back, the Fed will taper unless the data deteriorate,” Société Générale strategist Kit Juckes writes in a note this morning. “There is debate, but the fact the vol has not prompted second thoughts seems to me key.”

Making news today

In economics news:Commonwealth Bank business sales indicator for MayRBA quarterly bulletin is released

There is no major companies news scheduled for today

Analyst rating changesGPT Group raised to neutral at Credit SuisseToll raised to overweight at JPMorganANZ raised to outperform at CIMB

How we fared yesterday

Australian shares have gained ground as investors took a cautiously optimistic stance ahead of a keenly awaited update on economic stimulus measures in the United States.

The benchmark S&P/ASX200 index was up 47 points, or 0.98 per cent, at 4,861.4, while the broader All Ordinaries index was up 47.2 points, or 0.98 per cent, at 4,841.8.

BusinessDay with agencies

The original release of this article first appeared on the website of Hangzhou Night Net.