Morning Brief – Post FOMC Moves

The market continued to digest the rate decision from the Federal Reserve on Thursday, as stock futures in the USA continued to head higher and the US dollar remained under pressure.

Bank of America released a forecast for the Federal Open Market Committee in July, and the bank sees two more 25 basis points FOMC rate hikes, one in July and only September, pushing the terminal rate up to 5.5%-5.75%.

The Japanese yen currency moved above the 141.00 level as the currency lost ground after the decision. The USDJPY pair is currently approaching yearly highs.

Japan chief cabinet secretary Matsuno noted that it is “Important for fx to move stably reflecting econ fundamentals” and he had “No comment on every day-to-day fx moves.”

Elsewhere, the Asian session saw plenty of data releases from China and also Australia. The monthly report from the Australian economy moved the AUDUSD pair higher.

Employment in Australia surged by 75,900 to 14.10 million in May 2023, easily beating market forecasts of a 15,000 gain and after a downwardly revised 4,000 drop a month earlier.

This was the largest employment since June 2022, as full-time employment increased by 61,700 to 9,826,200, and part-time employment gained 14,300 to 4,185,600. Over the year to May, employment grew 465,500 or 3.4 percent.

Australia’s seasonally adjusted unemployment rate unexpectedly came in at 3.6% in May 2023, compared with market estimates and April’s figure of 3.7%.

Retail Sales in China increased 0.49 percent in April of 2023 over the previous month. China’s industrial production advanced by 3.5% year-on-year in May 2023, easing from a 5.6% rise in April and falling slightly less than market forecasts of 3.6%.

It was the 13th straight month of growth in industrial output but the softest pace in three months, mainly due to a slowdown in manufacturing activity and a decline in mining production.