Global Markets:
- Asian stock markets: Nikkei up 0.45 %, Shanghai Composite fell 2.50 %, Hang Seng declined 0.30 %, ASX lost 1.40 %
- Commodities: Gold at $1106.80 (-0.10 %), Silver at $14.36 (-0.10 %), WTI Oil at $44.20 (+0.10 %), Brent Oil at $47.40 (-0.10 %)
- Rates: US 10 year yield at 2.18, UK 10 year yield at 1.85, German 10 year yield at 0.66
News & Data:
- Bank of Japan leaves rates and size of QE programme unchanged
- BOJ: decision made in 8-1 vote
- BOJ: economy continues to recover moderately
- RBA: despite improving labour demand, spare capacity and wage pressures still weak
- RBA: growth expected to stay below average, but members saw improvement in recent months
- RBA: non-mining business spending subdued in near-term, but expected to pick up over time
- RBA: recent policy measures to support activity in china had not yet had their full impact
- PBOC Fixes Yuan Reference Rate At 6.3665 (prev 6.3709)
Markets Update:
The Bank of Japan left rates and QE unchanged as expected, but the USD/JPY declined nevertheless after the announcement. Traders are now waiting for the press conference at 07:30 BST and any possible dovish hints from the central bank. USD/JPY slowly rose to 120.60 after the NY close, but fell together with the Nikkei and eventually extended losses to 119.90.
EUR/USD traded in a 1.1300-28 range in Asia. Key intraday support is seen at 1.1280 and 1.1255, while the key levels to the topside are 1.1345 and 1.1370. Meanwhile, GBP/USD was caught in a 15 pips range overnight. We will get the latest UK inflation numbers at 08:30 BST and the market is expecting a 0.0 % print year-on-year and 0.2 % month-on-month.
The RBA released its meeting minutes overnight and AUD/USD had a quick 25 pips fall, but there were no surprises or much new in the text. The pair found some support at 0.7125 and recovered to 0.7140.
Upcoming Events:
- 07:30 BST – Bank of Japan Press Conference
- 07:45 BST – French CPI
- 09:30 BST – UK CPI
- 10:00 BST – German ZEW Economic Sentiment
- 10:00 BST – Euro Zone Trade Balance
- 13:30 BST – US Retail Sales
- 13:55 BST – US Redbook
- 14:15 BST – US Industrial Production
- 14:15 BST – US Manufacturing Production
