Yesterday saw equities settle in an upward trend for the day after initial volatility from the FOMC statement, which saw the Fed leave rates unchanged and dampening sentiment for a June rate hike but at the same time removing global events from their list of concerns. The DJIA finished up 0.28%, the S&P 500 up 0.16% and the NASDAQ 100 lost 0.51%.
Asia equities followed Wall Street’s lead in initial trade with the ASX 200 gaining 0.6% and the Shanghai comp gaining 0.1%. The Nikkei on the other hand lost 3% in the session after the BOJ disappointed markets after leaving rates unchanged and refraining from any additional monetary measures that the market was looking for.
Overnight FX trade saw the JPY strengthen across the board as news of the BOJ inaction filtered across the board with the USDJPY down over 350 pips from yesterday’s open. The NZDUSD broke above 0.6900 after the RBNZ also left the rates unchanged at 2.25% and striking a more hawkish tone than expected. The USD shed initial post Fed gains and traded lower against all its counterparts, driving the USD index to two week lows.
Commodities prices were relatively flat overnight, with crude oil consolidating after making new highs not seen since NOV 2015. The highs were reached despite Crude Inventories showing an increase in stored oil as news that Russia would take part in fresh discussion regarding the freezing of output, outweighed the release to strike a bullish tone in the commodity.
The data expected today is as follows:
- German Prelim CPI m/m expected at -0.2%
- Spanish Flash CPI y/y expected at -0.7%
- Spanish Unemployment Rate expected at 20.9%
- German Unemployment Change expected at 1K
- Advanced GDP q/q expected at 0.7%
- Unemployment claims expected at 258K
- Advanced GDP Price Index q/q expected at 0.5%
- ANZ Business confidence previously at 3.2
- PPI q/q expected at 0.2%
- RBA Assistant Gov Debelle due to speak