Global Markets:
- Asian stock markets: Nikkei down 1.10 %, Shanghai Composite fell 0.60 %, Hang Seng declined 0.65 %, ASX 200 rose 0.30 %
- Commodities: Gold at $1345 (+0.80 %), Silver at $20.33 (+1.70 %), WTI Oil at $42.10 (+0.40 %), Brent Oil at $44.10 (+0.40 %)
- Rates: US 10 year yield at 1.52, UK 10 year yield at 0.74, German 10 year yield at -0.09
News & Data:
- Australia Export Price Index (QoQ) Q2: 1.4% (est. 3.00%, prev. -4.70%)
- Australia Import Price Index (QoQ) Q2: -1.0% (est. 1.50%, prev. -3.00%)
- USD/CNY mid-point set at 6.6597 (prev fix 6.6671, prev. close 6.6700)
- Asia stocks edge higher, dollar down after Fed meeting – RTRS
- Oil scrambles off April lows but oversupply still weighs – RTRS
Federal Reserve Meeting:
- Fed leaves target rate unchanged at 0.25-0.50 %
- Fed says near-term risks to the economic outlook have diminished, economy expanding at moderate pace
- Fed says consumer spending growing strongly, business spending still soft
- Fed says will continue to assess international developments in determining when to raise rates
- Fed says labour market strengthened since June meeting, labour utilization has increased in recent months
- Fed says inflation remains below target, market-based expectations remain low, still sees rise to 2 % medium-term
- Fed repeats with gradual adjustments to monetary policy, economic activity will expand at moderate pace, labour market will strengthen
Markets Update:
The Federal Reserve decided to keep interest rates unchanged, as expected by the market. The statement had a slightly more hawkish undertone, but the Dollar fell in Asia nevertheless, as the central bank failed to signal when an another rate hike might finally arrive. The US Dollar fell against most major currencies overnight, except the British Pound.
USD/JPY came under renewed pressure in Asia and fell from 105.20 at the Tokyo open to a low of 104.65. The focus is now on the Bank of Japan meeting tomorrow. Analyst opinions are mixed, with some expecting further stimulus, while others think that the BoJ will remain on hold given that there will be an economic stimulus package announced by the Japanese government next week.
The commodity currencies recovered post-FOMC. AUD/USD rose from 0.7420 to 0.7490 first and then extended gains to 0.7530. NZD/USD rallied from 0.7010 to 0.7070 post-FOMC and continues to post fresh highs into the EU open. It is currently trading at 0.7120.
Upcoming Events:
- 08:55 BST – German Unemployment Rate
- 10:00 BST – Euro Zone Consumer Confidence
- 10:00 BST – Euro Zone Business Climate
- 13:00 BST – German CPI
- 13:30 BST – US Initial Jobless Claims
- 14:45 BST – US Consumer Confidence
