Global Markets:
- Asian stock markets: Nikkei up 0.05 %, Shanghai Composite gained 0.55 %, Hang Seng rose 1.50 %, ASX 200 rallied 1.10 %
- Commodities: Gold at $1257 (+2.25 %), Silver at $15.59 (+2.40 %), WTI Oil at $39.10 (+1.65 %), Brent Oil at $40.70 (+0.90 %)
- Rates: US 10 year yield at 1.90, UK 10 year yield at 1.53, German 10 year yield at 0.32
News & Data:
- Australia Employment Change Feb: 0.3k (est. 13.5K, prev. -7.5K)
- Australia Unemployment Rate Feb: 5.8% (est. 6.00%, prev. 6.00%)
- Australia Participation Rate Feb: 64.9% (est. 65.20%, prev. 65.20%)
- New Zealand GDP SA (QoQ) Q4: 0.9% (est. 0.7%, prev. 0.9%)
- New Zealand GDP (YoY) Q4: 2.3% (est. 2.1%, prev. 2.3%)
- Japan Trade Balance (JPY) Feb: 242.8B (est. 400.2B, prev. -648.8B)
- Japan Trade Balance Adjusted (JPY) Feb: 166.1B (est. 235.0B, prev. 119.4B)
- Japan Exports (YoY) Feb: -4.0% (est. -3.00%, prev. -12.90%)
- Japan Imports (YoY) Feb: -14.2% (est. -15.80%, prev. -17.80%)
- China FDI (CNY) (YoY) Feb: 1.8% (est. 1.7%, prev. 3.2%)
- PBOC set USD/CNY midpoint at 6.4961 (0.32% stronger)
- RBA's Debelle: Would like a lower AUD, obviously not everyone can have a falling currency – RTRS
FOMC Meeting:
- FOMC median fed funds est. 0.9% end-2016 vs 1.4% in December
- FED median fed funds est. 1.9% end-2017 vs 2.4% in December
- FED median fed funds est. 3% end-2018 vs 3.3% in December
- FED sees longer-run unemployment at 4.8% vs 4.9% in December
- FOMC's longer-run fed funds est. at 3.25% vs 3.5% in December
- FED releases new economic projections, benchmark rate outlook
- FED says global economic developments continue to pose risks
- FED: inflation expected to remain low in near term
- FED forecasts show shallower pace of rate rises in 2017-18
- Yellen: Outlook hasn't changed much since December
- Yellen: Moderate growth expected
- Yellen: Wage growth yet to show signs of a pick-up
- Yellen: Economy will continue to grow with gradual hikes
- Yellen: While financial conditions have improved lately, concerns over global growth have tightened conditions in US
- Yellen: Decision to hold rates reflects global developments
- Yellen: Caution is appropriate
Markets Update:
The US Dollar weakened across the board after the FOMC. While the central bank left rates unchanged, as expected by the market, the statement and comments from Fed Chair Yellen were more dovish than anticipated. EUR/USD rallied from 1.1080 before the release of the statement to a high of 1.1240, while GBP/USD rose from 1.4115 to 1.4270. Overnight, they retraced slightly. GBP/USD ran into decent resistance above 1.4280 and fell back to 1.4230, while EUR/USD consolidated in a 1.1205-30 range.
USDJPY has been under heavy pressure since the FOMC and continued its decline overnight, as it tumbled to 111.90. Further losses seem likely, with next support now seen at 111. Resistance is noted at 112.50 and 113.00.
Upcoming Events:
- 08:15 GMT – Swiss PPI
- 08:30 GMT – SNB Rate Decision
- 09:00 GMT – Norges Bank Rate Decision
- 10:00 GMT – Euro Zone CPI
- 12:00 GMT – Bank of England Rate Decision
- 12:00 GMT – BoE MPC Meeting Minutes
- 12:30 GMT – US Initial Jobless Claims
- 12:30 GMT – US Phily Fed Manufacturing Index
- 14:00 GMT – US JOLTs Job Openings
- 23:50 GMT – BoJ Meeting Minutes
