Themes

• General mood is “risk off”
• U.S. FOMC raises rates 25bps as expected
• Fed’s Powell: All signs point to an economy that can flourish with less accommodation

What’s Moving

Early overnight trade saw USD selling on talk (hopes) of a ceasefire in the Ukraine. This gave longs a bit of an opportunity to take profits off the table more than anything else.

This reversed quickly however after the FOMC gave the market what it wanted; a 25bp rate hike. The USD soared against all of the majors, until Fed Chair Powell hit the tapes, less hawkish than expected and the rest of the session turned into consolidation and position adjustment after the swings.

Thoughts

Well after that, expect position adjustment to dominate local trade today. Russia said overnight that it had paid its bond coupons, which would avoid a default, but we are awaiting clear signs that this happened.

Local data today sees:

• Japanese Core Machinery Orders (E: -2.0%)
• Australian Employment (E: 36k)