MORNING BRIEFING: Fed and BoJ without surprises

[RTFX-Trading]

MORNING BRIEFING: Fed and BoJ without surprises

What’s new :
United States: Fed leaves interest rates unchanged 'for an extended period'
United States: mixed figures for the U.S. economy
Great Britain: British unsustainable fiscal deficit for Mr. Bean
Euro area: S & P maintains its rating of Greece
Japan: Rates unchanged but additional injections of liquidity
World Bank: Upward revision of its economic forecast for China

Today:


Rates in Asia and Indices:
EURUSD: 1.3787 - 1.3763.
USDCHF: 1.0557 - 1.0538.
EURUSD: 1.5250 - 1.5209.
EURJPY: 124.98 - 124.09.
USDJPY: 90.67 - 90.03.
DowJones: 10'685 .98 +0.41%
NASDAQ: 2'378.01 +0.67%
S & P 500: 1'159.46 +0.78%
Nikkei: 10'846.98 +1.17%
Shanghai: 3'037.21 +1.48%
Gold: $ 1'126.85
Crude Oil: $ 80.98  

Comments:
Unsurprisingly, the U.S. central bank has kept interest rates unchanged at 0.25%, indicating that they will remain at this level for a prolonged period. However, some central committee members expressed their doubts as to the justification for this level, considering that an increase should occur in a time not too distant.

Even if the monetary policy committee has shown a little more optimistic than a month and a half ago, the image of the U.S. economy paint from the latest statistics remains mixed, with the good points in the moderate inflation and the improvement of the Employment, but unemployment rate remains too high and in the real estate sector the situation remains difficult, while the FED support program for the mortgage market should be completed by end March. Following the decision of the Fed, the U.S. dollar fell against the EUR.

Mr Bean, Bank of England deputy governor, declared the British fiscal deficit is unsustainable, estimated that the recovery in Britain would be bumpy.

The U.S. rating agency Standard & Poor's declared to maintain its rating of the sovereign debt of Greece, saying that the measures taken by the latter justified his notation, which also provided support to the EUR.

With no surprises as well, the Bank of Japan kept interest rates at its historic low of 0.1%, while doubling to 20 trillion (20,000 billion) of yen funds available to banks for 3 months. The loss of consensus within the central committee of the BoJ, however, calls for a central bank more flexibility to pressure from the government for more relax monetary policy

The World Bank has revised upwards its economic forecast for China, with a GDP to 9.5% and a CPI to 3.7%, recommending a tighter monetary policy and a reassessment of its currency the Yuan.

Good day

Pascal Bovay

RTFX Ltd
Trading desk
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