US markets lower at the close Asia may follow suit

US stocks were slightly lower overnight following new highs set on the S&P500 since 2008.

Stocks were lower on the back of the US Federal Reserve’s policy meeting minutes which dampened expectations for more immediate monetary stimulus. Still, US Federal Reserve Chairman Ben Bernanke’s comments from last week about the pace of economic growth not being adequate enough are unlikely to see large rallies in the US dollar for a while.

In the short term, there were some minor movements. The Australian dollar remains under pressure with a rate cut widely expected now at next month’s meeting. It last traded at 1.0310 against the US dollar, with 1.03 in sight this morning Asian time.

The Euro pared back recent gains to last trade at 1.3225. The Japanese Yen has consolidated recent minor gains with the US dollar last buying 82.77.

In Asian economic news, China’s Securities Regulatory Commission has reportedly increased the quota for qualified foreign institutional investors to $80bn from $30bn, according to a statement on its website yesterday.

The increase in foreign investment limits should see capital flowing into stocks, bonds and bank deposits as the Chinese government looks to stimulate consumption as a proportion of GDP.

The move follows China easing the purchase of its domestic bonds by Japanese investors earlier this year as the two countries look to satisfy political pressures from within over the way debt investors engage in the market.

Japanese Insurers and banks are turning to the AAA rated bonds, after S&P affirmed Japan’s sovereign-debt rating in February at AA- and maintained a negative outlook.