The two-day US Federal Reserve monetary policy meeting this week will dominate markets this week.
The conflab ends early Thursday morning, Sydney time and the post meeting statement comments on inflation, costs and the path of interest rates will condition market expectations, along with the so called dot plot of where Fed members think US interest rates are headed in the next year to 18 months.
Comments on winding back the size of the Fed’s huge balance sheet (which will be a monetary policy tightening when they start) are expected to dominate market expectations from the meeting.
US markets though were confident the Fed would not damage confidence on Friday as the three main indexes all ended the day and week at new record highs.
That saw the ASX 200 futures market notch up a 16 point gain for trading when it resumes later this morning.
The ASX ended last week with a loss of Friday, closing down 43 points, or 0.8%, after another missile test by North Korea rattled investor nerves. Those nerves did not last long.
The benchmark managed a 0.4% gain for the week, its first weekly advance in four. Oil reached a five-month high, But iron ore and copper fell sharply (See separate story).
Gold also suffered a steep fall, the US dollar rose on Friday and the Aussie currency ended the week just above 80 US cents as investors appeared to ignore the latest missile launch from North Korea on Friday.
The US dollar was up another 0.6 per cent against yen at ¥110.86, taking its gain against the Japanese currency since the end of last week to 2.8% while the yield on the 10-year US Treasury, was flat at 2.20%, although the two-year yield was up at 1.38%— taking it 0.11% over the week.
Dominating the end of the week was the record closes for all three major US equities indices on Friday. They also ended the week with weekly gains as well.
The S&P 500 crossed the 2,500 for the first time ever to hit a new record high of 2,500.23.
That brought its weekly gain to 1.56%, its best five-day run since January and reversing last week’s loss.
The index crossed the 2,400 threshold in May, so the index is up 100 points in four months.
The S&P 500′s advance so far this year is 11.5%.
The Nasdaq Composite added 0.3% to 6,448.47 on Friday, nearly recovering all the losses from a day earlier but failing to match the two straight record closing highs it notched earlier in the week.
For the week, the index gained 1.37%, after last week’s loss.
The Dow again soared closing up 0.0.3% to 22,268.34, its fourth straight closing record high of the week. Over the week, the Dow jumped 2.16%, its best five-day gain since December.
