Yen Aims Higher as Fed Roils Markets, Pound May Overlook BOE

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TALKING POINTS – YEN, COMMODITY CURRENCIES, STOCKS, BOE, BRITISH POUND

  • Yen up, commodity currencies down as Fed sinks APAC stocks
  • S&P 500 futures hint continued risk aversion is on the horizon
  • BOE rate decision might be a non-event for the British Pound

The anti-risk Japanese Yen rose while the sentiment-geared Australian, Canadian and New Zealand Dollars fell alongside stocks in Asia Pacific trade as regional bourses picked up a negative lead from Wall Street. The move follows a Fed monetary policy announcement that proved to be far less dovish than the markets predicted (as expected). The Kiwi underperformed on soft local GDP data.

The priced-in outlook implied in Fed Funds futures suggested investors had become unsure of seeing even one hike next year ahead of yesterday’s FOMC rate decision. For their part, Chair Powell and company dropped the reference to a likely third increase made in September’s forecast but stuck to their projection for two 25 basis point increases in 2019.

APAC shares are on pace to close down nearly 1.5 percent and bellwether S&P 500 futures are pointing sharply lower, hinting that more of the same is probably ahead. A policy call from the Bank of England tops the European calendar. It may be a non-event for the British Pound however as the growing threat of a disorderly “no-deal” Brexit keeps officials’ hands tied, at least in the near term.

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ASIA PACIFIC TRADING SESSION

Yen Aims Higher as Fed Roils Markets, Pound May Overlook BOE

EUROPEAN TRADING SESSION

Yen Aims Higher as Fed Roils Markets, Pound May Overlook BOE

** All times listed in GMT. See the full economic calendar here.

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