19 Sept: Fed cut by 25bp. Little market reaction. BOJ, BOE, SNB policy meetings today. Australian jobs data coming up.

By | September 19, 2019

The Fed did as expected and cut interest rates by 25bp on Wednesday but gave few hints of whether or when it might reduce borrowing costs further although in lowering the overnight lending rate to a range of 1.75% to 2.00% on a 7-3 vote, the FOMC did note the ongoing global risks and  the “weakened” business investment climate. Fed Chair Jerome Powell was relatively upbeat in his Press Conference though, by suggesting that the labor market remains strong and that he sees inflation likely to return to the 2% inflation goal. Given the expectations, the market reaction has been rather muted, with stocks closing flat albeit that the indices did see a spike lower from which they quickly recovered, while the US$ was generally a little firmer. The metals are a little lower as well, which WTI remains under $60 pb after a choppy session. Data showed the first US inventory build in four weeks, but any losses were kept in check on news that the US is seeking to build a coalition of European and Arab partners to take action by increasing sanctions against Iran after the attack on Saudi Arabia.

Thursday will be a busy one for the central banks, with the BOJ, BOE and SNB all handing down Interest Rate Decisions. Ahead of any central bank action though, the session will get under way with the Q2 NZ GDP (exp 0.4%mm, 2.0%yy) and the Australian Jobs report for August (exp 5.2%, +10K, PR;66.1%). Later in the day, from Europe, we get to see the Swiss Trade balance (August), the EU Current Account (July) and the UK Retail Sales (August – exp 0.0%mm, 2.9%yy). The US will feature the weekly Jobless Claims, the Philadelphia Fed Mfg Survey and the August Existing New Home Sales.

As far as the central banks are concerned, the BOJ, BOE and SNB are all expected to remain on hold although some form of adjustment from the SNB would not really surprise in light of the easing at last week’s ECB Meeting. Otherwise all the action is likely to come from the various statements/press conferences. Have a good day.

Economic data highlights will include:

Thur: NZ GDP, Australian Unemployment, BOJ Meeting/Interest Rate Decision, SNB Meeting/Interest Rate Decision, EU Current Account, UK Retail Sales, BOE Meeting/Statement/Minutes/Vote Count/APP Facility, US Current Account,

Market moves, in brief:

FX: DXY 98.60 (+0.40%)

Bonds: US10Y; 1.793% (-0.55%), German 10Y; -0.511% (-7.58%), UK 10Y; 0.565% (-8.03%), Australian 10Y; 1.149% (+0.67%), NZ 10Y; 1.250% (-2.46 %), China 10Y; 3.130% (+0.69%)

Stock Indices: DJI; +0.13%, S+P; +0.03%, NASDAQ; -0.11%, EUStoxx50; +0.19%, FTSE100; -0.09%, Shanghai Composite; +0.25%,

Metals: Gold $1493 oz (-0.54%), Silver $17.73 oz (-1.57%), Copper $2.6115 lb (-0.59%), Iron Ore $93.97 per tonne (NYMEX) (-0.06%),

Oil: WTI $58.19 pb (-1.04%)

CURRENCIES
EURUSD: 1.1028
Res  1.1055  1.1085  1.1115
Sup  1.1000  1.0975  1.0950
USDJPY: 108.45
Res  108.50  108.75  109.00
Sup  108.30  108.05  107.80
GBPUSD: 1.2467
Res  1.2505  1.2550  1.2595
Sup  1.2445  1.2400  1.2360
USDCHF: 0.9974
Res  1.0000  1.0025  1.0050
Sup  0.9950  0.9925  0.9900
AUDUSD: 0.6828
Res  0.6845  0.6865  0.6885
Sup  0.6815  0.6800  0.6785
NZDUSD: 0.6314
Res  0.6330  0.6345  0.6360
Sup  0.6300  0.6285  0.6270
INDICES / COMMODITIES
S&P.fs: 3010.78
Res  3020.00  3030.00  3040.00
Sup  3000.00  2990.00  2980.00
DJ30.fs: 27169.50
Res  27220.00  27320.00  27395.00
Sup  27080.00  26985.00  26895.00
SPI200.fs: 6678
Res  6690  6705  6720
Sup  6660  6645  6635
XAUUSD: 1493.21
Res  1500.00  1520.00  1510.00
Sup  1485.00  1475.00  1465.00
XAGUSD: 17.72
Res  17.95  18.20  18.45
Sup  17.55  17.30  17.05
WTI.fs: 58.14
Res  58.80  59.80  60.85
Sup  57.50  56.50  55.50