Asian equities attempted to stage somewhat of a recovery, following Wall Street's rebound late yesterday. We have bounced November lows, so while the picture remains bearish, we might have something of a retracement/consolidation, especially if we start climbing above yesterday's high.
Commodity currencies are slightly stronger after Crude & Equities found support and retraced from the lows. AUD also helped by upbeat RBA minutes. Nzd also strong, with USD largely weaker today.
Looking forward: UK inflation on tap and markets are expecting a slight rise; German ZEW is expected to increase modestly signalling
further improvement in the German business cycle. As for US data: ahead of the Fed decision we will see inflation numbers and core inflation is expected to rise 0.2% m/m. This will take the annual core inflation rate to 2.0%. A dovish surprise won’t generate much market reaction, but a hawkish surprise would generate some risk-off, adding to pressure on commodity currencies and EM. The US also releases the Empire manufacturing survey as well as the NAHB housing survey.
Charts for today:
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