Global Markets:

  • New Zealand Gross Domestic Product (Q4) (y/y): 3.1%, Expected: 3.0%, Previous: 3.5%
  • New Zealand Gross Domestic Product (Q4) (q/q): 0.9%, Expected: 0.9%, Previous: 1.4%
  • Asian equity markets are trading mostly lower
  • The Nikkei is down 1.30 % while the Hang Seng and ASX 200 both lost 1.20 %
  • S&P 500 futures dropped 0.25 % so far
  • Gold is trading at $1333 (-0.60 %) after another tough day for the precious metal
  • Crude Oil is recovering; trades at $99.40 (+0.20 %)
  • US 10 year yield stands at 2.75

FX Flows/Orders:

  • USD/JPY drifted slightly lower amid profit-taking and AUD/JPY selling from Tokyo
  • However, leveraged names are keen to buy the dips; bids seen at 102.20 and in better size at 102.00
  • An European bank was a noted seller of USD/CAD 1.1255-60, which capped the topside
  • Bids are building at 1.1220 down to 1.1180, while offers are placed ahead of the 1.13 barrier option
  • In EUR/USD, a US bank sold it through 1.3830, but bids at 1.3810 appeared to be in decent size
  • Dealers note demand is rebuilding at 1.3810, more bids seen towards 1.3770
  • A break sub-1.3750 would see plenty of stops triggered, including momentum sellers
  • Offers seen around 1.3850; intraday stops through 1.3860
  • New Zealand GDP came out in line with expectations, but the revision numbers have disappointed the market and kept the Kiwi under pressure
  • Talk of exporter bids in AUD/USD at 0.90, stops noted sub-0.8990

Market Sentiment:

The FOMC statement was more hawkish than most expected, with the FOMC expecting a faster increase in interest rates, beginning in 2015. The statement made it clear that a rate hike is not imminent and that the pace will be slow in the beginning, but the higher median forecast for the Fed funds rate caught most traders by surprise, leading to a rally in the US Dollar. 13 of the 16 FOMC participants expect rates to start rising in 2015 and the median projections are 0.75-1.0 % for end-2015 and 1.75-2.25 % by end-2016.

In the upcoming sessions, we have the SNB interest rate decision, where the bank will very likely leave it’s policy unchanged and stick to the 1.20 floor in EUR/CHF.  Bank of Japan Governor Kuroda is scheduled to speak at 07:15 GMT and we have a fairly busy US session ahead with Initial Jobless Claims, Existing Home Sales and the Phily Manu Index data.

Upcoming Events:

  • 07:00 GMT – German PPI MoM (0.1 %) YoY (-0.9 %)
  • 07:00 GMT – Swiss Trade Balance (2.24B)
  • 07:15 GMT – BoJ Governor Kuroda speaks
  • 08:30 GMT – Swiss National Bank Interest Rate Decision (unch; 0.00 %, 1.20 floor)
  • 12:30 GMT – US Initial Jobless Claims (325k)
  • 14:00 GMT – US Existing Home Sales (4.60M – 0.4 %)

·         14:00 GMT – Philadelpia Fed Manufacturing Index (3.8)