Morning briefing: let’s get ready for emotional punch
Today we are entering into a very volatile period for trading. There will be the three rate decisions on tap: Fed, BoJ and RBNZ
JPY: Earlier this motning the Bank of Japan announced the results of the comprehensive review of its monetary policy. Let’s skim through it: the negative rate is kept unchanged (-0ю1%); the monetary base is going to be expanded until inflation stable above 2%: the policy framework will be modified; there will be Qualitative + Quantitative Easing (the bank will keep buying JGBs so balance of BOJ’s holdings could increase at annual pace of 80 trln yen) with yield curve control to mitigate the side effects stemming from the negative rate policy (the BOJ will buy long-term government bonds to keep 10-year bond yields around current levels of 0%).
Take a deep breath, ease off for a while and go over the top once again
USD: Pending for the one of the most anticipated events this month – FOMC statement and economic projections + Janet Yellen’s press conference.
NZD: Later this evening the RBNZ is going to announce its benchmark interest rate and offer its commentary on the health of the NZ economy. Many economists expect the RBNZ to remain the Official Cash Rate unchanged (at 2%), but to cut it in November and then sit on hold for a lengthy period of time.
And a small splash of cold water from the US Energy Information Administration (EIA)
OIL: Weekly data on the change in the number of barrels of crude oil held in inventory by commercial firms are going to be released later this day. Last data showed that crude oil inventories shrank by 600,000 barrels to 510.8 million barrels (a relatively mild contraction). Gasoline inventories rose by 600,000 barrels, after a 4.2-million-barrel decline in the previous week