Sterling is performing strongly after the release of stronger than expected UK CPI data, indicating a rise in inflation rather than a slow-down in February. As a result, it is highly likely that the BoE will hike interest rates by another 25bps during their meeting tomorrow. However, there is now speculation on whether there will be a pause in May, making tomorrow's vote split more important than ever. Dollar, on the other hand, is softer in comparison to most currencies, with the exception of Yen, as investors await the FOMC rate decision. The consensus is that there will be a 25bps rate hike, but what comes next is highly uncertain. Due to recent market turmoil, Fed may also delay the publication of new economic projections, leaving investors unsure of what to expect. Elsewhere in the forex markets, Yen is the worst performer of the day due to rising US and European benchmark treasury yields, while Swiss Franc is the second worst. On the other hand, Euro, Aussie and Kiwi have been on the firmer side. Technically, one major focus today is the stock markets' reaction to Fed. NASDAQ's break of 11827.92 resistance yesterday was a near term bullish signal, affirming the view the corrective pull back from 12269.55 has completed at 10982.80 already. That is, rise from 10207.47 should be resuming. Another day of rally and close above 11827.92 will likely set the base for at least a take on 12269.55 soon. In Europe, at the time of writing, FTSE is up 0.11%. DAX is up 0.51%. CAC is up 0.35%. Germany 10-year yield is up 0.096 at 2.392. Earlier in Asia, Nikkei rose 1.93%. Hong Kong HSI rose 1.73%. China Shanghai SSE rose 0.31%. Singapore Strait Times rose 1.48%. Japan 10-year JGB yield rose 0.0879 to 0.334. |
