30 Jan 2014
European open: Risk-off prevails despite Fed taper
FXstreet.com (London) - The US Federal Reserve did as expected yesterday and continued its tapering programme. In his last act as Fed chairman, Ben Bernanke moved to reduce the size of the Fed’s monthly asset purchases by USD10bn, bringing monthly QE down to USD65bn. Despite the implicitly bullish outlook for the US economy, the announcement did little to support risk overnight.
Asian equity markets were subdued by the risk-off trade. The Nikkei fell 2.45 percent while the Hang Seng shed 0.48 percent following weaker than expected Chinese PMIs. HSBC manufacturing PMIs printed at 49.5, down from an expected 49.6 and from the December reading of 50.5.
The Aussie dollar came under continued selling pressure after yesterday’s bearish trend, but recovered some ground later in the session. The Kiwi dollar came under heavier pressure. The Reserve Bank of New Zealand held off on a rate hike, but set out its store for a hike in the near future.
German unemployment numbers are due at 8:55 GMT, expected to print flat at 6.9 percent with a decline in unemployment of 5k. Under greater scrutiny will be the German CPI numbers due at 13:00 GMT. Expectations are for a 0.1 percent rise to 1.3 percent year-on-year with hopes of some inflation increases in the Eurozone.
The main focus this afternoon will be on the US GDP report, with expectations of a 3.2 percent rise in the fourth quarter.
Asian equity markets were subdued by the risk-off trade. The Nikkei fell 2.45 percent while the Hang Seng shed 0.48 percent following weaker than expected Chinese PMIs. HSBC manufacturing PMIs printed at 49.5, down from an expected 49.6 and from the December reading of 50.5.
The Aussie dollar came under continued selling pressure after yesterday’s bearish trend, but recovered some ground later in the session. The Kiwi dollar came under heavier pressure. The Reserve Bank of New Zealand held off on a rate hike, but set out its store for a hike in the near future.
German unemployment numbers are due at 8:55 GMT, expected to print flat at 6.9 percent with a decline in unemployment of 5k. Under greater scrutiny will be the German CPI numbers due at 13:00 GMT. Expectations are for a 0.1 percent rise to 1.3 percent year-on-year with hopes of some inflation increases in the Eurozone.
The main focus this afternoon will be on the US GDP report, with expectations of a 3.2 percent rise in the fourth quarter.