After some choppy trade, when the Fed did as expected and left interest rates unchanged, the US$ has continued its rally into the end of the session while US stocks have fallen by around 0.75% because traders remain concerned over the worsening trade relations between the US and China. The Fed unanimously decided to keep its lending rate in a target range of between 1.5% and 1.7%, while expressing a confident economic outlook, stating that activity had expanded at a moderate rate and that inflation was close to its 2% target. The Fed is expected to increase rates in June.
In other data, earlier in the session the EU GDP growth slowed to 0.4% qq in Q1, while the EU unemployment rate was unchanged at 8.5% in March, staying at the lowest level since December 2008. Both figures were in line with expectation. The UK PMI construction rose to 52.5 in April, up from 47.0 and beat expectation of 50.5. In the US, the US ADP private sector employment rose 204k in April, slightly above expectation of 200k and comes ahead of tomorrow’s US jobs data.
Thursday will reflect on the FOMC decision while also looking forward to tomorrow’s US employment data but we also get the see the Australian Services PMI, New Home Sales and Building Permits. Europe will focus on the EU CPI (exp1.4%yy, Core; 1.1%) and PPI. while the US will focus on the Trade Balance, Jobless Claims, Factory Orders, ISM Non-Mfg PMI and the Markit Services/Composite PMIs. Japan Holiday.
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