Global Markets:
- Asian stock markets: Nikkei down 2.10 %, Shanghai Composite lost 0.05 %, Hang Seng declined 1.95 %, ASX 200 gained 0.20 %
- Commodities: Gold at $1303 (+1.20 %), Silver at $17.78 (+1.55 %), WTI Oil at $47.54 (-1.00 %), Brent Oil at $48.60 (-1.00 %)
- Rates: US 10 year yield at 1.56, UK 10 year yield at 1.13, German 10 year yield at -0.01
News & Data:
- Australia Employment Change May: 17.9K (est. 15.0K, rev prev. 800 from 10.6K)
- Australia Unemployment Rate May: 5.7% (est. 5.7%, prev. 5.7%)
- Australia Consumer Inflation Expectation May: 3.5% (prev. 3.20%)
- Australia New Motor Vehicle Sales (MoM) May: -1.1% (rev prev. -2.80%)
- Australia New Motor Vehicle Sales (YoY) May: 1.7% (prev. 2.20%)
- New Zealand GDP SA (QoQ) Q1: 0.70% (est. 0.50%, prev. 0.90%)
- New Zealand GDP (YoY) Q1: 2.8% (est. 2.60%, prev. 2.30%)
- PBOC sets USD/CNY fix at 6.5739 (prev. fix 6.6001, prev close 5.5786)
- Japan Chief Cabinet Secretary Suga: Watching FX markets closely, will take action if needed – RTRS
Bank of Japan Rate Decision:
- BOJ keeps monetary policy steady, maintains 80 trln yen base money target and 0.1 pct negative interest rate
- vote on monetary base target was 8-1
- BOJ: Japan's economy continues to recover moderately as a trend, keeps assessment unchanged from April
- BOJ: Cuts view on CPI
- BOJ: CPI likely to be slightly negative or about 0% for time being
Fed Rate Decision:
- US Federal Reserve Leaves Interest Rates Unchanged As Expected
- Fed Expects That Labour Market Indicators Will Strengthen
- Fed Projects Lower Rate Path In 2017 & 18
- Yellen: Economic Indicators Have Been Mixed, Stresses Data Dependence & No Set Policy Path
- Yellen: Slowdown in some parts of the economy, particularly weak business investment was a surprise
- Yellen: Economic Outlook Inherently Uncertain
- Yellen: Pace of labor improvement has slowed markedly
- Yellen: Important not to overreact to 1-2 weak jobs reports, we will be watching carefully
Markets Update:
USD/JPY fell sharply overnight. The US Dollar was already under pressure after a more dovish than expected Federal Reserve, and then the Bank of Japan decided to keep rates and the size of their QE programme unchanged as well. After the announcement, USD/JPY declined from 105.40 straight to 104.53, a fresh multi-year low. AUD/JPY is at 77.36, down 130 pips from the session high. EUR/JPY lost 1.25 % as it fell from 119.20 to 117.84 and GBP/JPY declined from 150.10 in the early Asian session to a low of 148.30 after the BoJ announcement.
The other major currencies initially strengthened against the US Dollar, but the JPY rally weighed on them as well. The New Zealand Dollar is the only risk currency that is currently up on the day, after better than expected GDP data out of New Zealand.
Economic Calendar:
- 08:30 BST – Swiss National Bank Rate Decision
- 09:30 BST – UK Retail Sales
- 10:00 BST – Euro Zone CPI
- 13:30 BST – US CPI
- 13:30 BST – US Initial Jobless Claims
