In This Article:
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures edge up, Nikkei futures down
* Fed leads pack of central bank meetings
* Market leaning toward 75 bp hikes from BoE & SNB
* Dollar just off multi-year highs
By Wayne Cole
SYDNEY, Sept 19 (Reuters) - Share markets idled in Asia on Monday as investors braced for a week littered with 13 central bank meetings that are certain to see borrowing costs rise across the globe and some risk of a super-sized hike in the United States.
Markets are already fully priced for a rise of 75 basis points from the Federal Reserve, with futures showing an 18% chance of a full percentage point.
They also show a 50-50 chance rates could soar as high as 5.0-5.25% as the Fed is forced to tip the economy into recession to subdued inflation.
"How high will the funds rate ultimately need to go?" said Jan Hatzius, chief economist Goldman Sachs.
"Our answer is high enough to generate a tightening in financial conditions that imposes a drag on activity sufficient to maintain a solidly below-potential growth trajectory."
He expects the Fed to hike by 75 basis points on Wednesday, followed by two half-point moves in November and December.
Also important will be Fed members "dot plot" forecasts for rates which are likely to be hawkish, putting the funds rate at 4-4.25% by the end of this year, and even higher next year.
That risk saw two-year Treasury yields surge 30 basis points last week alone to reach the highest since 2007 at 3.92%, so making stocks look more expensive in comparison and dragging the S&P 500 down almost 5% for the week.
Early Monday, holidays in Japan and the UK made for a slow start and S&P 500 futures were up 0.1%, while Nasdaq futures were flat.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1%, after losing almost 3% last week.
Japan's Nikkei was shut, but futures implied an index of 27,335 compared to Friday's close of 27,567.
HIKES ALL ROUND
BofA's latest fund manager survey suggests allocations to global stocks are at an all-time low.
"But with both U.S. yields and the unemployment rate headed to 4-5%, poor sentiment isn't enough to keep the S&P from making new lows for the year," warned BofA analysts in a note.
"Our suite of 38 proprietary growth indicators depict a grim outlook for global growth, yet we are staring at one of the most aggressive tightening episodes in history, with 85% of the global central banks in tightening mode."
Most of the banks meeting this week - from Switzerland to South Africa - are expected to hike, with markets split on whether the Bank of England will go by 50 or 75 basis points.