Australian shares are set to drop 1.4 per cent at the open as traders eye developments with Credit Suisse and the Fed’s upcoming policy meeting.
The Australian sharemarket is poised to open sharply lower on Monday as traders speculate whether the US Federal Reserve will keep interest rates on hold this week after two weeks of turmoil in the global banking sector.before markets open in Europe on Monday.Still, futures indicate the SP/ASX 200 will drop 1.4 per cent at the open, extending last week’s 2.1 per cent slide which marked the benchmark’s worst weekly loss since September.
The volatility across global markets heightens the focus on the Federal Reserve’s policy meeting this week, with the US central bank weighing whether to keep raising interest rates to cool inflation, or pause its policy tightening due to concerns about fragility in the banking system following rapid rate rises.
ANZ economists are leaning towards a quarter percentage point increase due to the measures implemented last week to support the banking sector and the strong economic data over recent months. The Bank of England will also decide on interest rates this week, with most economists tipping the UK central banks to lift rates by 0.25 percentage points to 4.25 per cent.
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