Global Markets:
- Asian stock markets: Nikkei down 0.25 %, Shanghai Composite fell 0.90 %, Hang Seng declined 0.10 %, ASX 200 gained 0.40 %
- Commodities: Gold at $1227 (+0.30 %), Silver at $15.09 (+0.20 %), WTI Oil at $38.15 (+1.05 %), Brent Oil at $40.15 (+0.75 %)
- Rates: US 10 year yield at 1.76, UK 10 year yield at 1.38, German 10 year yield at 0.12
News & Data:
- Australian AiG Performance of Construction Index Mar: 45.2 (prev 46.1)
- Japanese Official Reserve Assets (USD) Mar: 1.262tln (prev 1.254tln)
- PBoC set CNY midpoint at 6.4707 (prev midpoint 6.4754, close 6.4819)
- BoJ Kuroda: Will continue with QQE and negative rates until 2% inflation hit in stable manner
- Japanese Finance Ministry Official: Will take steps in FX market if needed – RTRS
- Japan Chief Cabinet Secretary Suga: Large FX moves have negative impact – RTRS
- Fed's Bullard: Could back a rate hike if inflation expectations rise
- Fed’s Kaplan: Expects “some period of time” before 2% inflation is hit – RTRS
- Kaplan: Fed should be gradual and patient
- Kaplan: Being an election year should not impact Fed decisions
- RBNZ’s Bascand: Monetary policy should continue to be accommodative – BBG
- Bascand: Wage pressures weaker than forecast
- Fed signals caution on rate hikes, worried by global growth: minutes – RTRS
- Oil prices up on U.S. inventory draw, but traders warn on premature rally – RTRS
- Asia shares inch up as oil surges, dollar slips – RTRS
FOMC Meeting Minutes:
- FOMC saw global conditions posing risks to US outlook
- Global economy, financial data are relevant for policy
- FOMC noted weak global growth could further boost US dollar
- Many on FOMC saw bigger global risks warranting policy caution
- FOMC saw further strengthening of the labour market and housing
- FOMC saw economy expanding moderately despite global headwinds
- FOMC saw economy broadly in line with earlier expectations
- Two FOMC members saw quarter-point hike as appropriate in March, citing US economic strength despite developments abroad
Markets Update:
The US Dollar came under pressure after the release of the FOMC minutes yesterday. The Fed warned about global conditions posing risks to the US economic outlook and that it might delay further rate hikes.
USD/JPY fell below 110 and momentum selling increased after the dovish FOMC comments. The pair extended losses in Asia and fell to 109.15, where it found support for now. Japanese officials are already commenting on the JPY strength, but it won't help much until there is an actual intervention. Below 109.15, the next key support level lies at 108.00.
EUR/USD rallied to 1.1430 after bouncing once again off the 1.1325-30 support area yesterday. Overnight, it reversed some of its recent gains as it fell to 1.1390, but it remains bid overall and further gains seem likely.
AUD/USD extended gains in Asia, but ran out of momentum ahead of the 0.7630 resistance level. It fell back to 0.76, where it is currently consolidating at. Support is seen at 0.7570 and 0.7510, while resistance lies at 0.7630 and 0.7685.
Upcoming Events:
- 07:30 BST – ECB's Praet speaks
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- 08:00 BST – ECB’s Constancio speaks
- 08:30 BST – UK Halifax House Price Index
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- 12:30 BST – ECB Meeting Minutes
- 13:30 BST – US Initial Jobless Claims
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- 22:30 BST – Fed Chair Yellen speaks
