Key Notes:
- Switzerland trade balance 2.47bn vs. 2.87bn
- Switzerland exports m/m -2.8% vs. 3.1% previously; imports m/m 3.1% vs. -0.3% previously
- SNB Libor rate, unchanged -0.75%
- ECB TLTRO 97.8bn vs. 40bn
- US initial jobless claims 290k vs. 293k
Later
- BoE’s Haldane speech
- US leading indicators and Philly Fed manufacturing index
The day after a dovish FOMC, markets were still reeling under the effects of a mixed FOMC meeting. While the Fed removed the word “patience” from its language, replacing with “reasonably confidence” Janet Yellen reiterated in her press conference that the removal of the word patient did not mean that a rate hike was on the cards yet, although the option for a June hike still remains on the table.
The Australian and Kiwi Dollars which saw a rally late last night on the FOMC news gave up its gains with price trading back to pre-FOMC levels. The Australian dollar was back 0.765 while the Kiwi dollar was back to 0.738 levels. New Zealand GDP data which was released a few hours after the FOMC failed to give the Kiwi dollar a boost as GDP grew as expected at 0.8%.
The Japanese Yen, which initially strengthened against the Greenback, was also back to pre-FOMC levels, after reversing from session lows of 119.375 to trade currently at 121 levels.
The European markets opened mixed with the Euro seeing some broad strength across the board but soon gave up on the rally. EURUSD was trading at 1.066 levels reaching highs of 1.10 during the FOMC volatility. The British Pound also weakened today failing to hold on to the gains from yesterday, trading back near the 1.485 levels.
During the European session, Swiss National Bank met for its quarterly monetary policy review. While the SNB’s Libor rate was left unchanged, the SNB expressed concerns about the strength of the Swiss Franc and that it would continue to intervene in the markets.
The SNB also keeps its options open in regards to further rate cuts if need be. Overall, the SNB’s meet today was more of a ‘wait and watch’ than having to take any measures during this meeting. While the Greenback managed to hold on to its gains against the Swiss Franc lifting off from session lows of 0.9798, the Euro declined against the Franc, falling from session highs of 1.07 to dip towards 1.055 levels before stabilizing.
USDCAD also erased all its losses from yesterday, reversing from lows of 1.255 to trade back near 1.272 levels.
The US trading session saw the release of the weekly unemployment claims which managed to come out softly lower than estimates, while previous week’s claims were revised higher. The US Dollar was however stronger on the news but key risks remains from the Philly fed manufacturing index due to be released later this evening.
Overall, it seems that a day after the FOMC and after a reactionary selloff in the US Dollar Index, the buck is back to resuming its bullish rally.
