Asia Pacific Market Open – Fed, US Dollar, S&P 500, New Zealand Dollar, Japanese Yen, Nikkei 225
- More hawkish Fed than what markets were anticipating shocked investors as the S&P 500[1] tumbled
- US Dollar[2] rallied, but Euro[3] & Yen stood their ground. New Zealand Dollar added to losses on GDP
- Asia Pacific markets bracing as risk aversion may linger, AUD[4] could extend decline on jobs report
Trade all the major global economic data live and interactive at the DailyFX Webinars[5]. We’d love to have you along.
Over the past couple of months, the markets became doubtful of more monetary policy tightening to come from the US amidst global growth fears, trade wars and yield curve inversion. The S&P 500 lost about 13.4% of its value since then. Heading into the December Fed rate decision, investors have become skeptical of even one hike in 2019[6].
Today, the central bank cleared things up. Not only did it raise rates by 25 basis points as anticipated, but policymakers collectively envisioned two hikes in 2019. While this is technically one less than previously seen, this is still well above market expectations. The tone from Fed Chair Jerome Powell afterwards did highlight their patient stance going forward[7], relying more on the results of economic data to come.
The US Dollar surged on the announcement, rising against most of its major counterparts. Meanwhile the S&P 500 extended its decline, closing at its lowest in 15 months as support held at 2,490 as anticipated[8]. Interestingly, local government bond prices rose
