FOMC decision at 2 PM
The AUD is the strongest and the USD is the weakest as the market awaits the FOMC decision and press conference later this afternoon. The Fed is expected to keep rates and policy unchanged but all eyes and ears will be on the expectations from the Fed given all the headwinds (or easing of headwinds) from Covid-19 and now the impact from the protests. Before the decision, the market will digest the CPI data at 8:30 AM ET, and oil inventory data at 10:30 AM ET (Crude oil is expected to have a -1.85M draw, the private data showed a surprise 8.4M build).
The ranges and changes show the USD is near low levels vs all the major currency pairs. The JPY pairs are mixed in more up and down trading. The low to high trading ranges are mixed as well vs their 22 day average (red line in the lower chart below).
In other markets:
- Spot gold is trading up $9.35 or 0.55% $1724.68
- WTI crude oil futures are trading $-0.80 or -2.05% at $38.14 after the surprise build and inventories from the private data yesterday
In the premarket for the US stocks, the futures are and implying a marginally higher opening. The NASDAQ index close at record levels yesterday while the S&P and Dow industrial average moved lower. For today:
- Dow is up 37 points
- S&P is up 9.32 points
- Nasdaq is up 67 points
In the European equity markets the major indices are marginally lower after trading higher earlier in the session
- German DAX, -0.1%
- France’s CAC, -0.25%
- UK FTSE, unchanged
- Spain’s Ibex, -0.2%
- Italy’s FTSE MIB, -0.64%
In the US debt market the yields down again with a flatter yield curve. The 2 – 10 year spread as contracted to 60.9 basis points from 62.3 basis points at the close yesterday.
In the European debt market, benchmark 10 year yields are trading mostly higher with the exception of the UK 10 year yield which is down -1.8 basis points. Investors are showing Spanish Italy and Portugal yields as each are showing gains. The French 10 year yield is trading up 0.9 basis points and further away from the 0.0% level. The yield is currently at 0.087%.