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Fed to remain watchful

Today’s news headlines:

‘US coronavirus surge to dominate Federal Reserve meeting’. Today’s Fed meeting is likely to focus on the sharp rise in US coronavirus cases and how the nation's central bank can best deliver more monetary support for the economy, but it's unlikely to move immediately. Yesterday, the Fed announced that it would extend all its emergency lending facilities until the end of the year. Meanwhile, Chairman Jerome Powell has ruled out negative rates, for the time being, leaning towards more aggressive forward guidance as the next step. (Financial Times)

‘UK weighs easing of travel rules after Spanish backlash’. The UK government, after receiving a backlash from tourists, airlines, and the Spanish government, is exploring ways to loosen quarantine rules for trips to Spain. Plans include regional restrictions instead of blanket curbs and reducing the amount of time those returning from the country will have to quarantine for. For Spain, the loss of British tourists is a major economic blow, so the government will be keen to strike a balancing act moving forward. (Bloomberg)

Today's events, rates, and data 

  • Asian stocks failed to find any solid direction overnight, with shares in Japan falling after Fitch downgraded its outlook on the country’s debt. Stocks in Hong Kong, South Korea, and China all ticked higher, however. European and US equity futures drifted lower ahead of the Fed meeting later. The US Dollar slipped vs the Yen.

Today's events

Aussie CPI: -1.9% vs 0.3% previously
German Import Prices: 0.6% vs 0.3% previously
US Pending Home Sales: 3.00pm
FOMC Statement: 7.00pm
Federal Funds Rate: 7.00pm
FOMC Press Conference: 7.30pm

Interbank rates:

GBP/USD: 1.2947
GBP/EUR: 1.1015
EUR/USD: 1.1753
USD/CAD: 1.3350