Federal Reserve Keeps Promise, Bank of England Today

The Federal Reserve delivered an interest rate hike as promised yesterday. Investors in Asia have remained risk adverse this morning. The Bank of England will release their Monetary Policy Summary today and the Bank of Japan is on the schedule tomorrow. Global equity markets appear cautious heading into today’s trading.

Fed Believes One More Hike Needed

The Dow Jones Industrials continued to add value on Wednesday. However, the S&P and NASDAQ slumped with small losses. The Federal Reserve delivered an interest rate hike as promised via a quarter of a point increase. Importantly, the Fed also indicated it believes one more interest hike later this year will be needed. Investors anticipated the Fed’s actions well. The U.S Dollar did experience fast trading before the Fed announcement, but essentially returned to known ranges as traders embraced the news. Weekly Unemployment Claims numbers will be published today and could prove interesting, but traders will keep an eye on the political theatre from Washington which continues to produce drama.

Bank of Japan’s Pronouncements Tomorrow

The Nikkei and Topix Indexes have remained cautious in early trading as investors continue to remain risk adverse. The Yen has been stronger against the U.S Dollar and the 109.00 level is an important juncture. However, the Bank of Japan will make its monetary policy pronouncement tomorrow and this will create volatility. Asian equities have seen tentative trading the entire week, yet they have suffered no major selloffs and it appears investors are continuing to monitor conditions as they await more impetus.

No Changes Expected from Bank of England

The Dax Index from Germany was able to produce gains on Wednesday, but other equity exchanges throughout Europe declined, including the Footsie. The Euro and Pound produced swift trading against the U.S Dollar leading up to the interest rate hike from the U.S central bank, but then returned to their known short-term ranges. The Bank of England will release its Monetary Policy Summary today, but no changes to the Official Bank Rate from the U.K are expected. Retail Sales numbers will also come from Britain. The Pound should provide traders with opportunities as the 1.28 level appears to be a focal point and short-term resistance.          

Slight Selling Early this Morning

Traders experienced a rollercoaster ride with the Gold on Wednesday, as its price climbed before the rate decision from the Federal Reserve was known, but declined in the aftermath when the official hike was announced. Gold has traded slightly lower this morning and the 1265.00 U.S Dollars an ounce mark appears important today.

Yaron Mazor is a senior analyst at SuperTraderTV.

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