1 Feb: Fed on hold while signalling a steady tightening path.

By | February 1, 2018

 

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.

CURRENCIES
EURUSD: 1.2416
Res  1.2435  1.2455  1.2495
Sup  1.2385  1.2360  1.2335
USDJPY: 109.10
Res  109.20  109.45  109.75
Sup  108.75  108.40  108.25
GBPUSD: 1.4188
Res  1.4230  1.4255  1.4285
Sup  1.4150  1.4120  1.4090
USDCHF: 0.9310
Res  0.9330  0.9360  0.9395
Sup  0.9290  0.9260  0.9230
AUDUSD: 0.8053
Res  0.8080  0.8110  0.8135
Sup  0.8035  0.8005  0.7985
NZDUSD: 0.7357
Res  0.7390  0.7415  0.7435
Sup  0.7345  0.7315  0.7280
INDICES / COMMODITIES
S&P: 2817
Res  2825  2835  2845
Sup  2810  2800  2790
DJI: 26061
Res  26150  26305  26380
Sup  26005  25940  25850
ASX SPI: 5974
Res  6000  6015  6035
Sup  5960  5940  5925
XAUUSD: 1344
Res  1350  1355  1360
Sup  1340  1335  1330
XAGUSD: 17.29
Res  17.40  17.50  17.65
Sup  17.15  17.05  16.95
WTI: 64.72
Res  65.20  65.70  66.10
Sup  64.00  63.65  63.05