Asian stocks brace for salvo of central bank hikes

By Wayne Cole SYDNEY (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.