The Fed left interest rates unchanged on Wednesday, while indicating that it would push ahead on its monetary policy tightening path as “economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate”. They also noted that, while inflation remained low it is expected to “move up” in the coming months. The outcome has seen US bond yields move higher, with the 10 year yield briefly top 2.75% for the first time since 2014 while the dollar made some mild gains, in choppy price action. Stocks have also been choppy but are currently pretty much unchanged from yesterday’s close, as are the metals and oil. In terms of data ahead of Friday’s US jobs report, the ADP figures showed 234k growth in private sector jobs in January, versus expectation of 183k. Employment cost index rose 0.6% in Q4, meeting consensus.
There is a fair bit of data to come today, although it would not surprise if the coming session is spent reflecting on yesterday’s FOMC meeting while also awaiting tomorrow’s US employment data and the Non-Farm Payrolls. As for today, Asia will kick off with the Australian AIG Performance of Manufacturing Index (Jan), the HIA New Home Sales (Jan), the Import/Export index (Q4), the Building Permits (Dec) and the Caixin China Mfg PMI. Europe and the US will look primarily to the Mfg PMIs and the ISM figures, and although there is little else to come from Europe the US will 29 Jan will also feature the Construction Prices (Dec) and the Total Vehicle Sales for January.
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