To the scoreboard:
Dow: 24,682.31 -44.96 (-0.18%)
S&P 500: 2,712.38 -4.56 (-0.17%)
AUD/USD: 0.7771 +0.0087 (+1.13%)
ASX SPI futures (June contract): 5,926 (-8)
1. The US Fed raised rates this morning as expected, and new Fed chair Jerome Powell played a pretty straight bat at his first post-rates press conference. The bank’s accompanying statement was balanced in its outlook and pointed towards two more rate hikes this year, although some analysts think the groundwork has now been laid for a fourth hike in 2018.
2. Currency markets were evidently positioned for a more hawkish Fed, as the US dollar index immediately slipped back under 90. The greenback dipped sharply against all its major trading pairs, including the Aussie which is up more than 1% this morning:
3. It’s jobs day: February employment data will be released at 11:30am AEDT, and Australia’s record streak of jobs growth looks set to continue with the median forecast for 20,000 jobs to be added. Today’s release also has important quarterly data on underemployment — a key indicator on the outlook for wage growth. David Scutt’s 10-second guide is here.
4. RBNZ stays put: Elsewhere in rates news, the Reserve Bank of New Zealand kept rates on hold this morning at 1.75% — a result entirely expected by the market. The RBNZ said economic growth and employment numbers should improve in the year ahead, although it expects inflationary forces to remain muted.
5. The S&P500 has been choppy in the wake of the rates announcement, and finished in the red after two separate intra-day rallies ran out of steam. US 10-year bond yields edged slightly lower to 2.88%. The wash-up is that ASX200 futures traders are betting on a small dip for the local index on a flat US lead.
6. And although US stocks reached a new all-time high in January, Bank of America Merrill Lynch argues there’s still opportunities if you know where to look. The BAML analysts cited the dispersion in forward earnings guidance among S&P500 companies — which is at its highest level since 2009 — which provides more opportunity for traders to differentiate between cheap and expensive stocks.
Have a great day.