It was a mixed day for trading in stocks across North America and Europe. The Dax dropped back in a normal retrenchment following a huge rally pulling other continental indices down with it. On the other hand, EUR continued to broadly rebound against other majors. It appears with the ECB’s QE program now underway, some traders have elected to take profits on short positions or go bargain hunting. The UK went in the opposite direction Tuesday with the FTSE climbing and GBP falling. Traders appear to be speculating that Chancellor Osborne’s budget could bring a lot of fiscal goodies with an election approaching in May. Employment figures and BoE minutes may also keep UK markets hopping over the next 24 hours. US indices were mixed today with the Dow and S&P finishing down while the NASDAQ and Russell 2000 were up moderately. USD and stocks remain fixated on tomorrow’s FOMC decision looking for signs of whether interest rate increases may start in June or not. In particular, traders may be looking for changes to the “patient” language which has been signalling no changes planned for the next two meeting. Traders may also look to the FOMC member projections of where they expect interest rates to be at the end of the year. The main cluster of expectations has been around 1.00% which could be achieved by 0.25% increases every second meeting starting in June or every meeting starting in September. Gold has continued to drift lower on expectations of a more hawkish Fed going forward. Crude oil remains under pressure, with WTI breaking down through $43.00 to a new low on trend and Brent approaching $53.00. Energy markets could be active again on Wednesday around the weekly US storage reports as traders continue to fret about supply outstripping demand particularly with the American Petroleum Institute (API) reporting another big increase this afternoon. It’s a light day for Asia Pacific news so unless we get any more surprises out of China, trading is likely to be dominated by global trends. NZD may see some positioning by traders ahead of tomorrow’s New Zealand GDP report. Corporate News Oracle $0.68 as expected, 25% dividend increase Adobe Systems $0.44 vs street $0.39 Economic News Significant announcements released overnight include: US API crude oil inventories 10.5 mmbbls vs street 3.0 mmbbls US housing starts 897K vs street 1,040K US building permits 1092K vs street 1,065K Canada manufacturing sales (1.7%) vs street (1.2%) Germany ZEW current 55.1 vs street 52.0 Germany ZEW expectations 54.8 vs street 59.4 Eurozone ZEW expectations 62.4 vs previous 52.7 Eurozone consumer prices (0.3%) as expected Eurozone core CPI 0.7% vs street 0.6% Norway trade balance NOK 21.0B vs street NOK 27.1B Upcoming significant announcements include: 10:30 am AEDT Australia leading index previous 0.1% 10:50 am AEDT Japan trade balance street (¥986B) 4:00 pm AEDT Japan BoJ monthly economic report 9:30 am GMT UK jobless claims street (30K) 9:30 am GMT UK unemployment rate street 5.6% 9:30 am GMT UK average weekly earnings street 2.2% 9:30 am GMT UK 3M employment change street 130K vs previous 103K 9:30 am GMT UK Bank of England minutes 12:30 pm GMT UK federal budget 10:30 am EDT US crude oil inventories street 4.4 mmbbls 2:00 pm EDT US FOMC monetary policy decision 2:00 pm EDT US FOMC member projections 2:30 pm EDT US Fed Chair Yellen press conference 10:45 am NZDT Thu NZ Q4 GDP street 3.4%
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