Asia Pacific Market Open – Fed, BoE, Brexit, US Dollar, S&P 500, Australian Dollar
- Fed Chair Jerome Powell sinks the US Dollar, boosts the S&P 500 and gold prices[1][2][3]
- BoE projects a disorderly Brexit to shrink GDP by 8% and sink GBP[4] by about 25%
- S&P 500 could resume its downtrend, Asia stocks may rise and AUD[5] could ascend
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The S&P 500 climbed about 2.3 percent, clocking in its best performance in a single day in eight months. Meanwhile the US Dollar depreciated across the board as local front-end government bond yields tumbled. Gold prices, the traditional anti fiat asset, rallied. The culprit? Look no further than the Chair of the Federal Reserve, Jerome Powell.
Mr. Powell spoke at the Economic Club of New York on Wednesday and said that there is no preset policy path, adding that rates are ‘just below’ the neutral range. The markets interpreted his comments as relatively dovish[7]. In fact, looking at Fed funds futures, expectations are now looking at less than two hikes in 2019[8] and these estimates have been weakening in recent weeks.
Additional Remarks from Jerome Powell
- Sees ‘great deal to like’ about the US economic outlook
- Moving too slow could risk higher inflation, imbalances
- Overall financial vulnerabilities at ‘moderate level’
- Impact of hikes uncertain, may take year or
