Headlines:
Markets:
- CHF leads, JPY lags on the day
- lower European equality; S&P 500 futures up 0.7%
- US 10-year yield up 4.4 bps to 4.542%
- Gold up 1.0% to $2,612.73
- WTI crude fell 0.2% to $70.42
- Bitcoin rose 1.3% to $102,276
It was a very interesting session as market players reacted to two key central bank decisions today after the Fed yesterday.
The post-Fed movements eased somewhat with the dollar retrieving gains along with a slight bounce in US intraday futures. But after the BOJ's earlier decision to keep interest rates unchanged, governor Kazuo Ueda sent a clear message that they were willing to kick the can down the road to March before hiking next time.
And that sent USD/JPY running higher early in the session from 155.50 all the way up to a high of 157.15 before settling just below 157.00 now. Ueda's point is that they don't have enough information about wage trends and there is a lot of uncertainty about Trump's upcoming taxes. Both of those things won't have changed that much by January.
Outside of that however, the dollar struggled to maintain gains from yesterday as we see movement across the board.
EUR/USD moved up from 1.0360 to 1.0400 while USD/CAD decreased from 1.4430 to 1.4375 during the session. Even the antipodes managed a bounce with AUD/USD finding buyers at key support at 0.6200 to 0.6250 currently.
GBP/USD led a small bounce to 1.2660 levels before pulling back to around 1.2630. And then we had the BOE policy decision, which saw three policy makers agreeing to a 25 bps rate cut – as opposed to just Dhingra. That sent cable down to 1.2605 for now, although it is still up 0.3% on the day.
In other markets, European indices are down around 1% broadly in line with Wall Street's losses yesterday. That said, the selloff isn't that bad as US futures are getting a bit of a bounce with S&P 500 futures seen up 0.7% today. It is still early days though as Wall Street is a different animal as has been seen several times this week.
On the bond front, short-term yields are down slightly but the long-term is still selling off with the US 10-year yield now rising to 4.54%. It's certainly something to keep an eye on as we look towards the closing stages this week and into the new year.
