The BOJ shook markets early this morning as it bucked expectations leaving interest rates as is, which caused the USDJPY to sell off sharply but only until the 101 support zone before markets digested the BOJ statement which left the door open for further easing, resulting in JPY weakness as we saw the USDJPY pop above 102.00.
Todays FED Rate, statement, projections and statement is expected to be the highlight of the day, week and perhaps even the month as markets anticipate how the Federal Bank of America sees current and future outlook of the US economy and whether it is time to take action. As it is markets are largely expecting a non-event in term of interest rate hikes this month but a surprise increase or strong indication that they would lift off in their next meeting would see the USD pick up more steam, gaining against its counterparts as gold and equities come off. However, should the Fed not raise rates and not give a positive outlook in which they are likely to increase rates, the USD will tumble heavily as the recent pricing in unwinds and then some.
Also worth watching is the crude oil inventory release, which with oil producers currently locked up in OPEC talks and the markets sensitivity to any news regarding supply, any surprise in the data would see severe volatility in the price of crude.
Today's data is then topped off with the RBNZ releasing its Cash Rate and rate statement before AUS Gov Lowe takes the stage. A cut to rates or an announcement inferring that rates are too high will see the NZD plummet further while a upside surprise or hints of hawkishness will result in a correction in the pair.
Today's key economic data is as follows:
- Public Sector Net Borrowing expected at 10.5B
- Wholesale Sales m/m expected at 0.3%
- FOMC Economic Projections
- FOMC Statement
- Federal Funds Rate expected unchanged at <0.5%
- FOMC Press Conference
- Official Cash Rate expected at 2%
- RBNZ Rate Statement
- RBA Gov Lowe Speaks
- US Crude oil Inventories expected at 3.2M