Dow jumps 100 as Fed meeting kicks off

Employees of the Tokyo Stock Exchange work at the bourse in Tokyo Japan

Shares of Facebook Inc shed almost 7 percent after reports that a political consultancy that worked on Trump's 2016 campaign gained inappropriate access to data on 50 million of the social network's users.

Asian stocks ended mixed on Wednesday as oil prices surged and investors braced for a 25 basis points United States rate hike under new Federal Reserve Chairman Jerome Powell later in the day.

It had struggled as the gap between 10-year German and US government yields, referred to as the "transatlantic spread", ratcheted out to its widest since December 2016.

Many analysts had been expecting that spread to narrow as the European Central Bank neared the end of its stimulus this year but it hasn't proved the case.

The Fed "will have to go some to really move the needle on market thinking or indeed, to take the dollar out of its current range and the FX market out of its mindset", said Kit Juckes, chief FX Strategist at Societe Generale.

Adam Cole, chief currencies strategist at RBC Capital Markets, said a "knee-jerk reaction" to the Fed flagging four hikes this year may see the dollar strengthen against the euro. Markets are pricing in three rises this year but some reckon policymakers could squeeze in a fourth, which might trigger a bond and equity selloff.

Elsewhere, the Canadian dollar and Mexican peso gained after reports that the US government administration had dropped a demand related to auto exports, removing a barrier to a deal for a new North American Free Trade Agreement. India's Sensex was rising 0.6 percent, Indonesia's Jakarta Composite index was up as much as 1 percent, Singapore's Straits Times index was moving up 0.2 percent and the Taiwan Weighted finished marginally higher.

"The economic situation post tax cuts also justifies a significant shift upwards in the dot plot", he added, referring to fears the Fed's de facto policy forecast chart could signal four rate rises rather than three, due to the economic boost delivered by Trump's tax reforms.

It will be the first media conference for new Fed chairperson Jerome Powell. "Expected is a confident Fed Chair, both with respect to the economy's strength and the Fed's approach to policy", said analysts at Westpac in a note. "Gradual and timely are the operative words for policy".

Abbas: "Hamas Responsible for Attempt on Prime Minister's Life"
The White House later Monday slammed Abbas's "insults", saying he must choose between hate and peace. -Palestinian relations. In response to Abbas, Friedman, who is Jewish, told a conference that Abbas's comments could have anti-Semitic connotations.

"The worst case is the '18 and '19 dots both move up - the Fed is now guiding to five hikes in '18 and '19 combined but under this scenario that would shift to seven hikes", they warned in a note to clients. "Stocks would probably tolerate one net dot increase over '18 and '19, but a bump in both years could create problems".

The Wall Street Journal Dollar Index, which measures the USA currency against a basket of 16 others, was recently up 0.4% at 84.15.

Trade will be top of the agenda at a two-day G20 meeting starting later on Monday in Buenos Aires and any signs of escalating stress between the USA and China could make investors in Asia nervous.

Dealers cite concerns about the U.S. budget and current account deficits, chaos in the White House, better growth in overseas markets, particularly Europe, and the risk of a US-led trade war, as among the reasons.

The prospect of higher US interest rates was been a burden for non-yielding gold, which slipped 0.8 per cent last week. The Canadian dollar CAD=D4 held at $1.3029 after hitting $1.3124 on Monday, a low not seen since mid-2017.

The US dollar was off 0.3% at ¥105.69 and not far from its recent trough at ¥105.24.

The greenback's weakness - it fell 10 percent a year ago - is at least partly down to USA capital seeking to invest overseas amid robust world growth.

Among the major commodities, oil prices jumped in line with the dollar and as investors remained wary of growing crude supply although tensions between Saudi Arabia and Iran provided some support.

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