Good morning team, Chris Conway your Chief Market and Trading Strategist here with your First Look.
The Aussie market is poised to open strongly higher later this morning, after US markets enjoyed a Fed bump overnight.
The US central bank raised interest rates by 25 basis points, as was expected, but limited the pace of further increases to two more this year – which was no change from the previous forecast.
Some in the market had worried that a hasty Fed could cause markets to wobble.
The decision to lift the target overnight interest rate by 25 basis points to a range of 0.75 per cent to 1.00 per cent marked one of the Fed’s most convincing steps yet in the effort to return monetary policy to a more normal footing.
At the same time, the Fed’s policy-setting committee did not flag any plan to accelerate the pace of monetary tightening. Although inflation is “close” to the Fed’s 2 per cent target, it noted that goal was “symmetric”, indicating a possible willingness to allow prices to rise at a slightly faster pace.
What’s on today:
Capital Economics on the Fed, pre the statement: “It is widely expected that the Fed will have raised interest rates by 25bp at the FOMC meeting. We don’t anticipate any major changes to the Fed’s economic projections, and while there may be a modest rise in the interest rate projections of individual Fed officials, we still expect the median forecast to imply three 25bp rate hikes this year.”
Local data: Australia jobs February, Consumer inflation expectations March, RBA foreign exchange transactions February; New Zealand GDP
Trading Ex-Div: AHG, BAP, SIV, SPK
Overseas data: Japan machine tool orders; Euro zone CPI; Bank of England policy meeting; US housing starts February, building permits February, initial jobless claims weekly, Philadelphia Fed March
- SPI up 34 points at 5818
- AUD at US76.85¢
- Dow Jones +0.5%; S&P500 +0.6%; Nasdaq +0.7%
- FTSE100 +0.2%, CAC +0.2%, DAX +0.2%
- Spot gold +1.6% at $US1217.60 an ounce
- Brent oil +1.6% at $US51.74 a barrel
- Iron ore +3.2% at $US90.93 a tonne
What happened overnight: