Global Markets:

  • Asian stock markets: Nikkei up 1.10 %, Shanghai Composite 0.80 % higher, Hang Seng gained 0.20 %, ASX rose 1.00 %
  • Commodities: Gold at $1208 (-0.05 %), Silver at $16.48 (+0.65 %), WTI Oil at $54.02 (-0.50 %), Brent Oil at $62.20 (+0.05 %)
  • Rates: US 10 year yield at 2.124, UK 10 year yield at 1.785, German 10 year yield at 0.382

News & Data:

  • Australia CB Leading Index 0.4 %, Previous: 0.1 %
  • Australia MI Leading Index 0.1 %, Previous: 0.0 %
  • Bank of Japan Interest Rate Decision 0.10 %, Expected: 0.10 %, Previous: 0.10 %
  • BOJ keeps monetary policy steady, pledges to increase monetary base at annual pace of 80 trillion Yen
  • BOJ: Japan's economy continues to recover moderately as a trend
  • BOJ revises up assessment of exports
  • BOJ's policy decision was made by 8-1 vote
  • BOJ: Consumer inflation likely to slow for time being, reflecting oil price falls
  • BOJ: Core consumer inflation, when excluding effect of last year's sales tax hike, moving around 0.5 %
  • BOJ: Private consumption has remained resilient, but recovery in some areas has been sluggish
  • BOJ: Japan's economy likely to continue recovering moderately as a trend

Markets Update:

No surprises from the Bank of Japan, which left both QE and interest rates unchanged. Their statement was mostly in line with the previous one and hence, there was not much of a reaction in USD/JPY. The pair briefly fell to a low of 118.90, but recovered quickly, trading now again above 119. USD/JPY had a solid bounce off the 118.30 support level and a daily close above 119.20 resistance would suggest we could see another move towards 120.40 soon.

EUR/USD continues to consolidate, but with occasional spikes higher/lower. While the uncertainty about Greece will continue to weigh on the Euro, further range trading between 1.1250 and 1.15 seems the most likely scenario in the near-term and fading the extremes on both side of the range the appropriate strategy.

GBP/USD had two choppy trading sessions yesterday. The pair fell to a low of 1.5330 after UK inflation data, rallied up to 1.54, only to hit a fresh low of 1.5320 in the NY session. It spent most of the Asian session trading between 1.5350 and 1.5360 and the focus is now on the UK employment data and the BoE meeting minutes at 0930 GMT.

Looking ahead, UK employment data and the FOMC minutes will be the two main events of the day.

Upcoming Events:

  • 06:30 GMT – Bank of Japan Press Conference
  • 09:30 GMT – UK Claimant Count Change (-25k)
  • 09:30 GMT – UK Average Earnings (1.7 %)
  • 09:30 GMT – UK Unemployment Rate (5.8 %)
  • 09:30 GMT – Bank of England Meeting Minutes
  • 13:30 GMT – US Building Permits (0.8 % m/m, 1.07mln)
  • 13:30 GMT – US PPI (-0.4 % m/m, 0.3 % y/y)
  • 13:30 GMT – US Core PPI (0.1 % m/m, 2.0 % y/y)
  • 13:30 GMT – US Housing Starts (-1.7 % m/m, 1.07mln)
  • 14:15 GMT – US Industrial Production (0.3 % m/m)
  • 14:15 GMT – US Manufacturing Production (0.3 % m/m)
  • 19:00 GMT – FOMC Meeting Minutes