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Forex & Equities: BOJ, FED & Session Ranges

Posted by Akhilesh Ganti on Apr 30, 2014 10:33:00 PM

As expected the BOJ stayed on hold yesterday though their outlook report did revise GDP projections for FY-2014 down to +1.1% from +1.4% while leaving inflation expectations unchanged. They also evinced a sense of optimism about the economy and indicated that they would need to see the economic effects of the recently instituted tax increases, preferring to be reactive rather than proactive, before embarking on any further stimulus measures.

With an unanimous vote the FOMC stayed the "tapering" course by reducing their monthly bond purchases to $ 45 Billion from $ 55 Billion though they continued to reiterate that the overnight target rate, currently between 0 to +0.25%, will remain in place "for a considerable time". This outcome was widely anticipated by the market and, if they continue the current pace, ensures that the Quantitative Easing (QE) program will cease completely by the end of this year.

In doing so they largely discounted the dismal performance of the US economy in the first quarter, a fact that was borne out by the abysmal +0.1% GDP reading that came out a bit earlier, and chose rather to focus on recent data which seems to suggest that economic activity is indeed picking up. Attention will now shift to Friday's US Non-Farm payroll report and the markets will likely need to see tangible proof before they are convinced of the FED's intuition.

Ranges:{WWM's New ALPHA Trader-DAILY charts [EUR, GBP, AUD, YEN, GOLD, OIL, DXY]}(click to enlarge)

FX 043014

Equities:{WWM's New ALPHA Trader-4 HOUR charts [Dow30, SP500, Nasdaq100, Japan225, China, Nifty50, FTSE100, ASX200]}(click to enlarge)

STOCKS 043014


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