0830hrs UK ECB’s Lautenschlaeger speaks in Brussels
0900hrs UK EU Manufacturing PMI (est 58.04 vs previous 58.6)
0900hrs UK UECB Publishes Economic Bulletin
0900hrs UK ECB’s Nouy speaks in Frankfurt
0900hrs UK Eurozone Services PMI (est 56.06 vs previous 56.2)
0930hrs UK UK Retail Sales Inc Fuel (est 0.34%mom/1.25%yoy vs previous 0.1%/1.6%)
1040hrs UK Swedish FSA Deputy Director General Martin Noreus speaks in Stockholm
1200hrs UK Bank of England MPC Rate Decision (est 0.5% vs previous 0.5%)
1200hrs UK Bank of England Asset Purchase Target (est £435bln vs previous £435bln)
1230hrs UK US Initial Jobless Claims (est 225.98K vs previous 226K)
1345hrs UK US Manufacturing PMI (est 55.52 vs previous 55.3)
1400hrs UK US Leading Indicators (est 0.54% vs previous 1.0%)
1615hrs UK Norges Bank Governor Oystein Olsen speaks in Washington
1700hrs UK Bank of England’s Dave Ramsden speaks in London
1845hrs UK Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks in Toronto
EU Leaders meeting in Brussels
STOCKS: US stocks ended slightly lower yesterday, with the major indexes giving up gains in choppy trade after the Fed raised rates by the expected 0.25%, while strong gains in the energy sector helped offset any losses. The Fed raised rates and highlighted at least 2 more hikes for this year, signaling growing confidence that Trump’s tax cuts and government spending will boost the US economy and inflation causing more aggressive tightening in the future. The S&P500 closed 2711.93 down 5.01 points, the Dow ended 44.96 points lower at 24682.31, and the Nasdaq100 finished 32.468 lower at 6853.452
The Nikkei 225 was playing catch up following yesterday's holiday and managed to lodge gains of nearly 1%, even as the USDJPY fell by around 40 pips. Energy names predictably led the way following 2 strong sessions for oil prices, while financials lagged. - Chinese related indices fell, with the CSI 300 down & the Hang Seng -0.6%. IT lagged in Hong Kong, with heavyweight Tencent dragging following a disappointing earnings release, whereas banks garnered support in front of earnings. Energy names outperformed. - Australia's ASX 200 shed 0.25% as telecoms & IT led the decline, with energy & materials trading higher.
US TSY/RECAP: Post-FOMC chop saw futures make new highs then session lows as market digested the Fed's updated dot plot, then Powell's press conference put a bid back into the space. - Short end Eurodollar futures reversed losses and then pulled higher as Powell noted that there is no sense that we are "on the cusp of an acceleration in inflation." - Focus is on the steeper dot plot as 2019 & 2020 medians moved higher, with interest in the EDZ9Z0 spread over the last couple of sessions apparent. - T-Notes last 120-04+, US 10-Year Yield last 2.883%.
OIL: Oil finished virtually unchanged overnight, with WTI trading at $65.20 & Brent trading at $69.40, as crude held on to its DoE inspired gains, after the headline crude release registered a drawdown in the weekly inventory report. - It is worth noting that US production has continued to tick higher according to the official release.
GOLD: Gold lost around $2 to trade at $1,330/oz overnight after the yellow metal rallied as the FOMC median projection (just about) stuck to 3 hikes in 2018.
FOREX: A modest burst of USD weakness was apparent in early Asia-Pacific dealing, with pressure on USDJPY leading the way. Talk of a large bid between 105.80-85 being pulled help the pair move lower, although USDJPY's Mar 16 low of 105.60 has helped contain JPY strength. EUR & GBP have also moved higher vs. USD, with some notable nearby EURUSD option expiries in play on Thursday. - Elsewhere a disappointing Australian labour market report alongside a flatter domestic yield curve led to AUD underperformance. The NZD traded flat against the greenback, as outgoing RBNZ Gov. Spencer noted that forecasts still assume some NZD depreciation, although he did point out that "NZD is in the vicinity of fair value." The RBNZ decision provided few points of interest as the central bank stood pat. - USDCAD has operated under 1.2900 for the bulk of the session.