Themes

· General mood is “risk off”

· U.S. Fed hikes interest rates 50bps, as expected

· Fed Chair Powell: 50bp more of hikes at next two meetings in play

What’s Moving

As was expected, it was a quiet session in Europe overnight ahead of the much-anticipated U.S. FOMC rate decision. The Fed gave the market what it wanted; a 50bp rate hike, that was 100% priced into futures markets.

This saw an initial relief rally on the Dollar, before comments from Fed Chairman Powell talking down the risks of a 75bp rate next meeting saw profit taking trim gains. Some players were hoping for an even bigger hike in the June meeting.

Thoughts

For today, expect a quiet start in Asia as locals digest the as-expected move from the Fed overnight. This will most likely play out as consolidation of overnight moves. Added to the lethargy will be another holiday in Japan today.

Local session data today sees:

· Australian Building Approvals (E: -11.7%)

· Australian Trade Balance (E: 8.50bln)

· Chinese Caixin Services PMI (E: 40.1)