Global Markets: 

  • Asian stock markets: Nikkei unchanged, Shanghai Composite down 0.20 %, Hang Seng gained 1 %, ASX lost 0.70 %
  • Commodities: Gold at $1237 (+0.05 %), Silver at $18.73 (+0.05 %), Crude Oil at $93.70 (-0.10 %)
  • Rates: US 10 year yield at 2.582

News & Data: 

  • New Zealand Current Account QoQ NZ$-1.06bln vs NZ$-0.95bln expected
  • New Zealand Current Account YoY NZ$-5.80bln vs NZ$-5.79bln expected
  • Australia MI Leading Index MoM -0.1 % vs -0.1 % prior
  • China MNI Business Indicator 52.2 vs 57.3 prior 

FX Overview: 

  • AUD – AUD/USD rallied yesterday on the news that China’s central bank will provide a 500 billion Yuan liquidity package to the country’s top 5 banks. This sparked a rally in emerging market currencies and put the US Dollar under pressure. Comments from the prominent Fed watcher Jon Hilsenrath added to this. Hilsenrath said in a webcast for the Wall Street Journal that he thinks that the Fed will not drop the words „considerable time“ in their upcoming statement, referring to the time that rates will remain low after the QE programme has ended. AUD/USD rallied to 0.9111 and slowly declined 0.9058 during the Asian session. Leveraged names were the main sellers in the past session and offers are noted at 0.91 and 0.9120. Note that there is a large option expiry ($1.8 billion) at 0.91 for today’s NY cut at 14:00 GMT, which might attract price. To the downside, key support now at 0.9054, 0.9020 and then 0.8982.
  • CAD – USD/CAD declined yesterday, from 1.1070 to a low of 1.0960 in the late NY session. Comments from the Bank of Canada Governor were in line with expectations and the BoC is likely to remain neutral in the near-term. Key support at 1.0940 and dealers note that there are bids building around that in level in good size.
  • EUR – EUR/USD hit into good selling interest pre-1.30 from macro funds and other leveraged names. Much depends now on today’s FOMC statement, as a disappointment for the USD bulls could push the EUR/USD above 1.30 and trigger further short-covering. On the other side, should the Fed indeed be more hawkish, we will likely see a test of the 1.2850 support level soon. Until then, a 1.2920-80 range seems likely. Keep in mind that Euro Zone inflation data will be released at 09:00 GMT (10:00 London).


Upcoming Events: 

  • 08:30 GMT – Bank of England Meeting Minutes
  • 08:30 GMT – UK Claimant Count Change (-30k)
  • 08:30 GMT – UK Unemployment Rate (6.3 %)
  • 09:00 GMT – Euro Zone CPI (0.1 % MoM, 0.3 % YoY)
  • 12:30 GMT – US CPI (0.1 % MoM, 1.9 % YoY)
  • 12:30 GMT – US Current Account ($-114bln)
  • 14:00 GMT – NAHB Housing Market Index (56)
  • 18:00 GMT – Fed Rate Decision
  • 18:00 GMT – FOMC Statement & Economic Projections
  • 18:30 GMT – Fed Chair Yellen speaks