US equities remained stalled at record highs in the absence of fresh catalysts. Risk-sensitive currencies fell, while US bond yields ranged sideways..
The FOMC minutes contained no surprises, again indicating that it would be "some time" before officials see "substantial further progress" on the dual goals on employment and inflation. Policy actions would be based on "observed outcomes", rather than forecasts. Officials "noted that a benefit of the outcome-based guidance was that it did not need to be recalibrated often in response to incoming data or the evolving outlook." On the economic recovery, the minutes noted improvement due to stimulus and vaccinations, but also warned that the pandemic continued to pose risks.
Commodities, Brent crude oil futures rose 0.4% to $63.00, copper fell 1.4%, iron ore rose 1.3% to $172.40, and gold fell 0.4%.
Overnight Currency Ranges
AUD/USD 0.7602 0.7676
EUR/USD 1.1861 1.1915
GBP/USD 1.3725 1.38385
USD/JPY 109.58 109.94
NZD/USD 0.6998 0.7065
USD/CAD 1.2564 1.2633
USD/CNH 6.5386 6.5529
AUD/JPY 83.50 84.24
AUD/NZD 1.0837 1.0865
A lacklustre response across asset markets following the FOMC Feb meeting with confirmation they aren’t planning any changes to the bond-buying programme any time soon. A quieter data calendar now ahead for the remainder of the week and expect we could see some further subdued sessions into the weekend.
AUD/USD traded to a low of 0.7602 in offshore trade and has managed only a limited bounce to date. Offering interest is still expected toward 0.7700 while demand remains thin although will likely emerge if we see a dip to the 0.7560 region.
Event Risk Data Today
NZ: April is likely to see a deterioration in the ANZ Business Outlook survey and a continued divergence across sectors. In late March, the Government announced major interventions in the housing market. These changes are likely to be a drag on house prices and confidence.
China: Ahead of the March release, foreign direct investment has moderated from its December high.
US: A clearer downtrend has been established for initial claims, which is a big positive for sentiment (market f/c: 680k). Fed Chair Powell will take part in the IMF panel on the global economy, and the FOMC’s Bullard will discuss the economy and monetary policy.