Global Markets:
- Asian stock markets: Nikkei down 1.30 %, Shanghai Composite rose 0.40 %, Hang Seng gained 0.35 %, ASX up 0.90 %
- Commodities: Gold at $1128.70 (+1.00 %), Silver at $15.09 (+0.70 %), WTI Oil at $46.70 (-0.40 %), Brent Oil at $49.10 (-0.10 %)
- Rates: US 10 year yield at 2.18, UK 10 year yield at 1.96, German 10 year yield at 0.78
News & Data:
- New Zealand ANZ Consumer Confidence (Sep): 110.8 (prev 109.8)
- RBA Gov Stevens: Don't See Major Disruptions In Aussie Markets From Fed Move — BBG
- RBA Gov Stevens: 6.2% Jobless Rate Too High, Would Like It In The '5's
- RBA Gov Stevens: AUD Drop Starting To Have Effects On Spending
- RBA: If AUD Falls Lot From Here, We Could Cope; Wont Derail Economy — MNI
- PBOC Fixes Yuan Reference Rate At 6.3607 (prev 6.3712)
FOMC Highlights:
- Fed funds rate left in the 0.0% to 0.25% range
- Fed votes 9-1 for unchanged. Lacker dissents and wanted 0.25% hike
- Interest rate level target remains appropriate
- Global economic and financial events may restrain economic activity; Fed is monitoring developments abroad
- 11 members see FF below 0.5% at the end of 2015 vs 7 in June
- 13 see lift off in 2015 vs 15 in June , 3 see 2016, vs 2 in June
- 1 sees negative FFR end of 2015 and 2016
- 1 sees 1st hike not appropriate until 2017
- Economy will expand at a moderate pace with appropriate accommodation
- Inflation to rise gradually to 2% target
Markets Update:
The US Dollar fell against all major currencies after the FOMC meeting yesterday. The central bank left rates unchanged and expressed their worry about the recent global economic and financial events. Most bank analysts now expect a rate hike in December.
EUR/USD rallied to a high of 1.1433 overnight. Immediate resistance is seen at 1.1460, followed by 1.1520 and the late-August high of 1.1707. GBP/USD, which already got a boost from strong UK employment data on Wednesday, extended gains further, reaching the 1.5630 level. It failed to sustain upside momentum there and fell back to 1.5555 in the Asian session, but remains well bid overall. USD/JPY is having a bad day post-FOMC. It fell from 121.00 to 120.20 in the NY session and then eventually extended losses to 119.65 in Tokyo. Next major support is seen at 119.38, which is Tuesday's low. Commodity currencies were not doing as well as the Euro and the Pound. AUD and NZD both rallied against the US Dollar post-FOMC, but gave up all of the gains shortly later. AUD/USD is now consolidating around the 0.72 level, while NZD/USD has traded in a 0.6350-80 range in the late Asian session.
Looking ahead, the Canadian CPI release is the only notable event today.
Upcoming Events:
- 09:00 BST – Euro Zone Current Account
- 13:30 BST – Canadian CPI
- 15:00 BST – US CB Leading Index
