ASIA-PACIFIC

Equities in the region finished in positive territory after a dovish FOMC saw positive gains in Wall Street. A weakening dollar also saw commodities rise, which boded well for certain sectors in the region. The Nikkei 225 finished up 1.39%, lower than the initial rally of the day as the strengthening JPY impacted exporters and weighed down the index. Chinas Shanghai Composite finished higher at +1.53% with the PBOC sustaining the supportive monetary stance. Australia’s ASX 200 finished at +1%, largely due to gains in commodities.

Data out of the region was mixed with NZD posting better than expected GDP q/q figures ( 0.9% vs 0.7%) and AUS posted a better than expected Unemployment Rate ( 5.8% vs 6%) and worse than expected Employment Change (0.3k vs 11.6k).

Data out of the region today is minimal with the BOJ Monetary Policy Meeting Minutes taking center stage as all eyes look to the BOJ in these times of uncertainty and an ever strengthening JPY.

USA

The US session started off with a hawkish tone as data out of the region came out mostly positive, supporting the FED`s statements of late. However, the FOMC meeting had a different story to tell, as the FED kept rates unchanged and projected a further 2 increases this year vs the initial 4 projected in DEC 15. FED Chairman Yellen stated that global forecasts are down enough to affect the outlook for the US, which prompted the FED to cut inflation and GDP forecasts for the foreseeable future. Yellen tried to keep the tone from being too dovish by stating that every meeting will be an important one with the FED more likely to increase rates than to cut them. Markets, however, interpreted the communications as dovish which has resulted in the USD tumbling across all crosses and equities and commodities soaring in value.

Today’s data out of the US is as follows:

  • Philly Fed Manufacturing Index exp. -1.4
  • Unemployment claims exp. 267K
  • Current Account exp. -117B
  • JOLTS Job Openings exp. 5.57M

UK

The GBP continued to tumble in early trade yesterday despite better than expected figures which saw the Claimant Count Change increase decrease by 18k vs 8.8K and the Average Earnings Index increase to 2.1% vs 2%. The UK`s woes continues as UK Chancellor Osborne reduced the GDP and Inflation forecast for the UK throughout 2016.

Today’s announcements and events out of the UK will give us a clearer picture as to the future of the UK economy and the sterling as the BOE releases the Official Bank rate Votes (expected to stay at 0-0-9), the Official Bank Rate (expected unchanged at 0.5%), any changes to the Asset Purchase Facility (expected at 375B) and the much anticipated Monetary Policy Summary.

With all figures expected to remain unchanged, markets will be looking to the summary to try and decipher the future of the UK. A more dovish tone will see the GBP fall as UK worries deepen.