Thursday 17th September: Markets lower as Fed statement puts fears of length of pandemic

Global Markets:

• Asian Stock Markets : Nikkei down 0.67%, Shanghai Composite down 0.41%, Hang Seng down 1.79%, ASX down 1.22%
• Commodities : Gold at $1951.50 (-0.96%), Silver at $27.02 (-1.66%), Brent Oil at $41.93 (-0.69%), WTI Oil at $39.83 (-0.82%)
• Rates : US 10-year yield at 0.679, UK 10-year yield at 0.216, Germany 10-year yield at -0.485

News & Data:

• (AUD) Unemployment Rate 6.80% vs 7.70% expected
• (AUD) Employment Change 111.0K vs -40.0K expected
• (NZD) GDP q/q -12.20% vs -12.50% expected
• (USD) Federal Funds Rate <0.25% vs <0.25% expected
• (USD) Crude Oil Inventories -4.4M vs 2.1M expected
• (USD) Retail Sales m/m 0.60% vs 1.10% expected
• (USD) Core Retail Sales m/m 0.70% vs 1.00% expected
• (GBP) CPI y/y 0.20% vs 0.10% expected
• BoJ Gov Kuroda: Japanese Economy Started To Pick Up
• BOJ to hold fire, signal resolve to work closely with Suga’s new cabinet

Markets Update:

Asian stock markets are mostly lower on Thursday amid worries about the economic recovery from the coronavirus pandemic despite a dovish monetary policy announcement by the U.S. Federal Reserve, with the central bank leaving interest rates unchanged and signalling rates are likely to remain at near-zero levels for years to come. The economic projections provided by the central bank along with the announcement suggest most Fed officials expect interest rates to remain unchanged through at least 2023.

Japan’s Nikkei 225 slipped 0.7% while the Topix index dipped 0.4%. Mainland Chinese stocks were also lower, with the Shanghai composite and the Shenzhen component down 1%. In Australia, the S&P/ASX 200 traded 1.1% lower. Hong Kong’s Hang Seng index led losses among the region’s major markets as it fell 1.8%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, sat at 93.517 after earlier touching a high of 93.592. As the dollar gains, oil prices gave up some of their big gains made on Wednesday on a drawdown in U.S. crude and gasoline inventories, with Hurricane Sally forcing a swath of U.S. offshore production to shut.

Upcoming Events:

• 11:00 AM GMT – (GBP) MPC Official Bank Rate Votes
• 11:00 AM GMT – (GBP) Monetary Policy Summary
• 11:00 AM GMT – (GBP) Official Bank Rate
• 11:00 AM GMT – (GBP) MPC Asset Purchase Facility Votes
• 12:30 PM GMT – (CAD) ADP Non-Farm Employment Change
• 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
• 12:30 PM GMT – (USD) Unemployment Claims