Asian shares lose grip of winning streak on Fed meeting
![](https://www.cityam.com/wp-content/uploads/2020/06/1215156166.jpg?w=742)
Asian shares failed to hold on to their 10-day winning streak today, swinging lower after a glum economic outlook from the US Federal Reserve fuelled fears that it would have to provide further support to an already record high level of stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent, marking the end of a 10-session winning streak.
While the yen managed to climb slightly, Japan’s Nikkei slipped 2.1 per cent. Chinese blue chips held steady. E-Mini futures for the S&P 500 slipped 1.1 per cent. FTSE futures shed 1.6 per cent, while Eurostoxx 50 futures lost 2.2 per cent.
It came as the US central bank forecast no interest rate increases until at least the end of 2022, and predicted that the US economy would shrink by 6.5 per cent in 2020 in the wake of the coronavirus pandemic.
Fed chairman Jay Powell’s announcement that US unemployment would be 9.3 per cent by the end of the year did little to allay investor fears, causing global stocks to fall. Powell emphasised that the road to recovery would be long, and that he was “not even thinking about rising rates” for at least another two years.
Initial risk of more easing had caused the US dollar to buckle slightly yesterday to a three-month low before steadying at 107.03 yen.
“The Fed’s view — that you’ll be paid almost nothing for holding US dollars until at least 2022 — is never going to be helpful for any currency,” noted analysts at CBA.
He confirmed the US central bank was studying the effect that yield curve control — a form of easing used in Japan and Australia — might have on the US economy.
Data released yesterday showed core US consumer prices fell for the third month in a row in May, marking the longest period of decline since records began.
Oil prices fell on the back of US data which showed crude inventories had risen to record highs.
Brent crude futures fell $1.18 to $40.55 a barrel, while US crude lost $1.32 to $38.28.
Before the Open: Get the jump on the markets with our early morning newsletter