Asian equities struggled to recover lost ground overnight, after risk appetite was hit yesterday through lower Crude prices and tension as the markets await the end of the Chinese plenum, the FOMC, the BoJ. The ASX was the underperformer due to an earnings miss from NAB, and lower CPI which also hit the AUD.
Not much cross-influence on FX though. The Jpy pairs saw short-covering ahead of the FOMC and macro bids between 119.90 and 120.10, due also to a large op-ex in that area. The only notable mover overnight was the Aussie as a softer than expected CPI raised rate-cut expectations to 80% for December. I don’t feel like chasing this move, given also the amount of space travelled already today. Also, I do not expect much movement in USD-pairs pre-FOMC.
Looking ahead, we have central bank announcements today. Not only the FOMC (19.00 CET), which many expect to be a volatile but less important event (unless Yellen surprizes everyone with either an uber-dovish view or an uber-hawkish view) but the Riksbank (9.30 CET) and RBNZ (21.00 CET) decisions are less clear. The market is expecting to hear dovish comments from both CB’s, so anything different will be quite a surprize.
We also have some ECB speakers today: Hansson speaks at 10 CET, Praet speaks at 10.15 CET and Constancio speaks at 15.45 CET. Finally, the US DOE inventory data will be crucial for Crude and Cad traders alike.
No Charts for today – wait & see mode for me.