To the scoreboard:
- Dow: 26,385.28 -106.93 (-0.40%)
- S&P 500: 2,905.97 -9.59 (-0.33%)
- AUD/USD: 0.7258 +0.0008 (+0.11%)
- ASX200 SPI futures (December contracts): 6,164 (-17)
1. The US Fed raised rates as expected, and caused a bout of volatility in markets by removing the word “accomodative” from its accompanying statement on the outlook for monetary policy. The full recap is here.
2. The statement was interpreted as dovish by markets, and stocks rallied while the USD fell. But at the follow-up press conference, Fed chair Jerome Powell clarified that policy settings are still accommodative — a signal of more rate rises to come. That gave rise to a sharp reversal as US stocks wiped out earlier gains.
3. It was equally volatile on currency markets, as the AUD reached a high as 0.7314 US cents before falling back to around 0.7260. In other notable moves, the Canadian dollar lost more ground as the Trump administration appears to be doubling down on threats to exclude Canada from a NAFTA trade deal.
4. And US treasury yields tumbled following the Fed’s announcement, with benchmark US 10-year yields back below 3.05% this morning after almost reaching 2018’s intra-day peak of 3.126% earlier this week.
5. The Reserve Bank of New Zealand kept rates on hold this morning at 1.75%, and said its next move could be up or down but added that downside risks to the economy remain. The Kiwi dollar was little-changed following the announcement.
6. Bitcoin edged higher to around $US6,500 overnight, and Chinese Bitcoin mining giant Bitmain has filed IPO documents with the Hong Kong Stock Exchange. Bitmain said it had revenues of $US2.8 billion in the first half of 2018.
Here’s a look at today’s busy economic calendar:
- Quarterly job vacancy data from the ABS in Australia (11:30am AEST).
- Eurozone money supply and consumer confidence data.
- German inflation.
- US jobless claims and the second reading of Q2 GDP.
- US PCE inflation data for August (the preferred inflation measure of the Fed).
Have a great day.
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