Markets prepare for FOMC Statement and Press Conference this evening
Key Notes:
- New Zealand current account 0.66bn vs. 0.27bn
- Japan trade balance -0.18trn vs. -0.17trn
- Australia MI leading index m/m -0.1% vs. 0% previously
- UK average earnings index 3m/y 2.7% vs. 2.5%
- UK claimant count change -6.5k vs. -12.5k; unemployment rate 5.5%
- BoE releases meeting minutes
- Switzerland ZEW economic expectations 0.1 vs. -0.1 previously
- Eurozone final CPI y/y 0.3% as expected; CPI y/y 0.9% as expected
- Canada wholesale sales m/m 1.9% vs. 0.3%
Later:
- Crude Oil inventories
- BoE MPC member Forbes speech
- BoE Governor Carney speech
- FOMC economic projections
- FOMC statement
- FOMC press conference
The currency markets opened today on a cautious note ahead of the Fed’s FOMC statement due for release later this evening. Market expectations are for no rate hikes in June but the tone of the statement will likely pave way for future rate hikes, which is currently expected for September/October this year.
The Asian trading session was quiet with no major market moving events. The Australian dollar declined from the open near 0.77515 posting a session low to 0.76765 at the time of writing. The Melbourne Institute leading index declined 0.1%. The Kiwi is seeing a continued sell off with the currency trading below the lows of 0.6953.
The Japanese Yen continued to weaken again as BoJ officials and other Japanese ministers continue to water down the comments from BoJ Governor Kuroda last week which saw the Yen strengthen remarkably. It is expected that the Yen could continue its weakness heading into the FOMC event tonight. With support firmly established at 123.305, USDJPY looks poised to test previous highs near 124.5.
The European trading session saw the UK’s unemployment data continue to improve. While the unemployment rate remained unchanged at 5.5%, it still marks the low since 2008. The average earnings index continued to gain, rising 2.7% 3months to the year, beating estimates of 2.5%. The GBPUSD surged on the news, posting fresh monthly highs near 1.5742, but still short of last month’s high near 1.5779.
The Bank of England released its meeting minutes which did not see any major shifts from the MPC’s view on monetary policy.
From Europe, with the exception of the CPI numbers from Eurozone, there were no other releases. Inflation rose 0.3% on the core and 0.9% on the headline, matching estimates. The Euro was however trading sideways against the Greenback within the range of 1.1348 and 1.1133. Against other currencies, the Euro remained strong for the most part, despite Greece crisis heading into crunch time with the deadline looming for Thursday midnight.
The US trading session saw the release of Canadian wholesale sales which rose 1.9%, beating estimates of 0.3%. The Canadian dollar was however unchanged.
Later in the evening, besides the FOMC event, BoE Governor Mark Carney will be giving a speech, which could bring some added volatility to the GBPUSD currency pair.
