Comment: BoJ Policy Meeting, Australian Dollar Down after RBA Meeting
May 20, 2014 7:10 am
A mixed picture emerging for European equity markets this morning, with UK and German markets underperforming indices in France, Italy and Spain. Traders are searching for catalysts for fresh direction following the subdued previous market session.
Of course, geopolitical risks continue to weigh on market sentiment amid hearing news out of Thailand over the declaration of martial law by the Thai army. In Ukraine, tensions may be cooling somewhat after Russia ordered troops back to base in an attempt to de-escalate the situation, but markets are still unconvinced that the situation is improving there.
Asian markets overnight were up a touch while S&P500 futures are currently flat while across other assets, major forex crosses are steady while commodity prices are mixed with gold paring back from recent gains, off around a buck to $1,291 an ounce. In the bond markets, the US 10-year Treasury yield is up 1 basis point to 2.55%, around some 8 basis points higher that the six-month low touched at the end of last week.
The euro is trading around $1.3697, way off its highs of $1.40 reached after the last ECB Meeting. As yet there is no confirmed information as to what form quantitative easing might take if the bank does decide to introduce it.
Over in Asia, the Bank of Japan started a two-day policy meeting in which markets are hoping the BoJ addresses recent strength in the yen, after the central bank’s efforts to weaken the currency over the past year were credited with boosting growth and tackling deflation.
Meanwhile, over in Australia, the country’s dollar is down some 0.5% to around US$0.9284 after the release of meeting minutes from the Reserve Bank of Australia which allowed for the possibility that the economy will grow “below trend” in the coming year, but the central bank reckons low interest rates will be enough to stimulate the economy.
Looking ahead, we have UK producer price and consumer price inflation, however, the focus is shifting to Wednesday’s release of the FOMC April minutes. We also have UK retail sales data due on Wednesday which will be eagerly awaited.
A mixed picture emerging for European equity markets this morning, with UK and German markets underperforming indices in France, Italy and Spain. Traders are searching for catalysts for fresh direction following the subdued previous market session.
Of course, geopolitical risks continue to weigh on market sentiment amid hearing news out of Thailand over the declaration of martial law by the Thai army. In Ukraine, tensions may be cooling somewhat after Russia ordered troops back to base in an attempt to de-escalate the situation, but markets are still unconvinced that the situation is improving there.
Asian markets overnight were up a touch while S&P500 futures are currently flat while across other assets, major forex crosses are steady while commodity prices are mixed with gold paring back from recent gains, off around a buck to $1,291 an ounce. In the bond markets, the US 10-year Treasury yield is up 1 basis point to 2.55%, around some 8 basis points higher that the six-month low touched at the end of last week.
The euro is trading around $1.3697, way off its highs of $1.40 reached after the last ECB Meeting. As yet there is no confirmed information as to what form quantitative easing might take if the bank does decide to introduce it.
Over in Asia, the Bank of Japan started a two-day policy meeting in which markets are hoping the BoJ addresses recent strength in the yen, after the central bank’s efforts to weaken the currency over the past year were credited with boosting growth and tackling deflation.
Meanwhile, over in Australia, the country’s dollar is down some 0.5% to around US$0.9284 after the release of meeting minutes from the Reserve Bank of Australia which allowed for the possibility that the economy will grow “below trend” in the coming year, but the central bank reckons low interest rates will be enough to stimulate the economy.
Looking ahead, we have UK producer price and consumer price inflation, however, the focus is shifting to Wednesday’s release of the FOMC April minutes. We also have UK retail sales data due on Wednesday which will be eagerly awaited.
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