Global Markets:
- Asian stock markets: Nikkei down 0.70 %, Shanghai Composite gained 0.15 %, Hang Seng fell 0.40 %, ASX 200 declined 0.10 %
- Commodities: Gold at $1232 (+0.15 %), Silver at $15.29 (-1.50 %), WTI Oil at $36.90 (+1.50 %), Brent Oil at $39.15 (+1.05 %)
- Rates: US 10 year yield at 1.96, UK 10 year yield at 1.55, German 10 year yield at 0.32
News & Data:
- BoJ's Kuroda: Exports rising gradually, but exports and production have shown weakness
- BoJ's Kuroda: BoJ will ease again in all three forms (quantity, quality and rates) if needed: BBG
- BoJ Gov Kuroda: Hypothetically there is still room to cut negative rates even further: BBG
- Global stocks and dollar on tenterhooks for Fed, oil bounces – RTRS
- Fed seen holding U.S. rates for now, leaving door open for June hike – RTRS
- Oil rises as U.S. producers struggle; inventories may weigh – RTRS
- Dollar on hold as Fed looms, kiwi & sterling pressured – RTRS
Markets Update:
USD/JPY rallied overnight after comments from BoJ Governor Kuroda, who said that further easing might be possible, including cutting rates further into negative territory. USD/JPY rallied from 113.02 in the early Asian session to a high of 113.55, while EUR/JPY reached the 126.00 level.
Meanwhile, price action in the other major pairs was fairly quiet, as traders are waiting for today’s Fed decision. EUR/USD traded in a 1.1095-1.1112 range, while GBP/USD consolidated between 1.4124 and 1.4160. GBP/USD has come under renewed pressure, but is looking slightly oversold in the short-term. 1.4105-20 is a solid support area and unless employment data, which will be released today at 09:30 GMT, arrives well below expectations, a bounce from here back towards 1.42 seems possible.
AUD/USD spent the Asian session in a 0.7040-72 range and is approaching an area of key support at 0.7420-25, followed by 0.7380-90. Much will depend on the FOMC tonight, but as long as it can stay above 0.7350, techs remain bullish.
The focus today will be on the FOMC meeting. The Fed is expected to keep rates unchanged, but traders will expect to get further clues from the statement and Yellen’s press conference on when the next rate hike might come.
Upcoming Events:
- 09:30 GMT – UK Unemployment Rate
- 09:30 GMT – UK Claimant Count Change
- 12:30 GMT – US Building Permits
- 12:30 GMT – US Housing Starts
- 12:30 GMT – US CPI
- 13:15 GMT – US Industrial Production
- 13:15 GMT – US Manufacturing Production
- 14:30 GMT – US Crude Oil Inventories
- 18:00 GMT – Federal Reserve Rate Decision
- 18:00 GMT – FOMC Statement
- 18:30 GMT – Fed Chair Yellen speaks
- 21:45 GMT – New Zealand GDP
