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Markets were a bit of a damp squib overnight as we lumber towards tomorrow’s Fed meeting. Risk sentiment was slightly weaker with positions trimmed in US and European equity markets (shock, horror –even the DAX was down!) and US treasuries finding a small bid from the 5yr mark on out. The dollar index was also a touch weaker, driven almost entirely by a small EUR rebound to around the 1.06 level as most of the other DXY components were either flat (CHF, JPY etc) or under more pressure (GBP, CAD, NOK). AUD continued to leak lower and failing a dovish surprise from the Fed (always a possibility!) it seems like all those macro headwinds are going to keep grinding away here…. Elsewhere commodities were not particularly pretty, iron ore just keeps slipping lower, base metals were all lost ~1% and crude….ouch….it was being sold throughout the session, then inventory data came out and it fell out of bed. April settled at $42.43 but no one appears to be panicking just yet, that rebound to $85 is just around the corner right?! For the day ahead there is nothing much of note in Asia but there is a small Fed press conference tomorrow. It kicks off at 0500 Sydney time so prepare for the rather vacuous discussion about the word patient making it, or not making it into the statement to go into overdrive. Exciting stuff. The SPI (Mar) finished at 5837, essentially unchanged. It tagged a 5813 low overnight but true to recent form bounced back quickly. Unless it can break above 70/75 the risk is still downside….looking for a 5800 – 5860 range today. Otherwise keep an eye on FMG, they abandoned their USD2.5bln refinancing deal this morning due to ‘market conditions’ (that old chestnut!) and early trade should be extremely interesting. |
