Global Markets:

  • Australia Building Approvals -5.0 % MoM vs -2.0 % expected
  • Australia Export Price Index -7.9 % QoQ vs -4.5 % expected
  • Australia Import Price Index -3.0 % QoQ vs -1.3 % expected
  • Australia Private Sector Credit 0.7 % MoM vs 0.4 % expected
  • Japan Average Cash Earnings 0.4 % YoY vs 0.7 % expected
  • UK GfK Consumer Confidence Survey for July comes in at -2. Prior 1, Expected 2
  • Bank of England’s Broadbent: Raising rates earlier is better from gradual path, risk of late move is faster inflation
  • Broadbent: Quite possible that the Pound is currently overvalued, would weaken if global growth accelerated
  • Bank of Japan’s Kuichi: Japan economy is recovery moderately, paying more attention to downside risks on growth
  • Kuichi: Prices gains influenced by temporary factor of weak Yen, improved economy is having ‘moderate’ effect on price gains
  • IMF says China should make Yuan more flexible, reduce intervention
  • China has ‘web of vulnerabilities’ across economy, IMF says
  • Asia stock markets: Nikkei up 0.30 %, Shanghai Composite unchanged, Hang Seng down 0.10 %, ASX gained 0.20 %
  • Commodities: Gold at $1295 (-0.10 %), Silver at $20.62 (+0.10 %), Crude Oil at $99.65 (-0.60 %)
  • Rates: US 10 year yield at 2.551

FOMC Statement – The Highlights:

  • Fed reduces bond buying to $25 billion per month
  • Fed says inflation has moved somewhat closer to long-run objective; previous statement had said it was “running below” objective
  • Fed says likelihood of inflation running persistently below 2 % has diminished somewhat
  • Fed says unemployment rate declined but a range of labor market indicators suggest significant underutilization of labor resources
  • Fed repeats highly accomodative policy to be appropriate for considerable time after asset purchases program ends

FX Update:

  • AUD – AUD/USD continued to trade with an offered tone during the Asian session. The pair started around 0.9330 and fell to a low of 0.9306 in the early Tokyo session. It bounced from there, but intraday resistance at 0.9330 held again and the Aussie settled around 0.9315-20 for the rest of the session. Any larger rally will be met with decent selling interest from leveraged names and a test of the 0.92 level seems increasingly likely. Furthermore, the Aussie is struggling more than the Kiwi after yesterday’s events and specs that rushed into a AUD/NZD long might get squeezed out. Key support at 1.09.
  • CAD – USD/CAD consolidated around 1.0905 overnight, after strong gains in yesterday’s US session. A test of the 1.0960 resistance level (June ’14 high) seems imminent, but the rally is likely to get exhausted up there, as plenty of specs will look to book profits pre-1.10. Bids from leveraged names at 1.0860, while offers resting at 1.0920.
  • EUR – EUR/USD traded 1.3392-1.34 overnight. Talk of option-related demand ahead of 1.3350 and offers from leveraged names towards 1.3425.
  • JPY – USD/JPY slowly declined in the Tokyo session, after breaking above 103.00 post-FOMC. Bids resting at 102.70 and in good size 102.40-50. Intraday stops building through 102.60 and 102.40. To the topside, resistance at 103.43 (April 7 high) and then 103.76 (March 7 high).

Upcoming Events:

  • 06:00 GMT – German Retail Sales (1.0 % MoM, 0.8 % YoY)
  • 06:00 GMT – UK Nationwide HPI (0.5 % MoM, 11.3 % YoY)
  • 06:45 GMT – French Consumer Spending (0.1 % MoM)
  • 07:55 GMT – German Unemployment Change (-5k)
  • 07:55 GMT – German Unemployment Rate (6.7 %)
  • 09:00 GMT – Euro Zone CPI (0.5 % YoY) Core CPI (0.8 % YoY)
  • 12:30 GMT – Canadian GDP (0.3 % MoM)
  • 12:30 GMT – US Initial Jobless Claims (300k)
  • 13:45 GMT – US Chicago PMI (63.0)