Marketsforu Morning Markets

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ASIA

Asian equity markets traded mostly higher with the energy sector outperforming following the strength in crude prices. This saw the sector lift the ASX 200 (+0.2%) and Hang Seng (+1.1%), while the Nikkei 225 (+0.9%) initially traded lower on disappointment after the BoJ remained on hold and provided no clues of future easing. Markets in mainland China remained closed for the final day of the Golden Week holiday. JGBs traded lower amid a lack of buying but the pared most of its losses as the BoJ kept monetary policy unchanged as expected.

BoJ kept monetary base unchanged at JPY 80trl as expected and said it is to look out for risks an adjust policy as appropriate. BoJ also added that CPI is likely to be around 0% for the time being, but will continue QQE until 2% CPI is stable. 

EUROPE/UK 

UK BRC Shop Price Index Y/Y -1.90% (Prev. -1.40%). 

According to the one of the members of the Times shadow monetary policy committee, the MPC should lift rates next month with a 12.5bps hike. 

FX

USD/JPY broke below 120.00 as the BoJ refrained from additional stimulus and gave no clues as to future policy bias, while NZD/USD extended on its Fonterra GDT auction gains where milk prices rose for a 4th consecutive auction, which also coincided with AUD/NZD breaking below the 1.0900 level.

COMMODITIES

WTI crude futures extended on its 1-month highs following the draw-down in yesterday’s US API crude inventories, while gold (+0.10%) traded sideways near 1-week highs underpinned by mild Dollar weakness.

US 

Fed's Williams (voter, hawk) reiterated calls for a 2015 rate lift-off and said that the US needs at most 100,000 new jobs a month. Williams also stated that policy will remain accommodating even after the rate hike due to low inflation and that this will be the most gradual tightening in the Fed’s history.