FOMC: Economic Situation Warrants Gradual Rate Hikes
Wells Fargo said "The key focus of the statement was the updated treatment of risks to the outlook for economic activity and inflation. The key sentence from the March statement on “global economic and financial developments continue to pose risks” was removed. Instead, it was changed to the Fed will be “monitoring” the aforementioned, with the addition of inflation indicators. In our opinion, the updated policy statement remains constructive to our view that U.S. economic conditions will continue to evolve in a direction that places the Fed in a position to consider a near-term rate hike, if conditions warrant. Activity abroad, financial developments and inflation appear to be the key sign posts for whether such a move can occur. Although we did not get the outright assessment of the balance of risk statement that will likely be required to lift interest rates, the statement did not remove the possibility of a June hike. Data performance over the next two months will tell us whether that possibility exists."
BOJ surprises the market with unchanged policy
Summarized of BOJ's meeting by DailyFX
- Keeps 80T Yen monetary base target, negative rate kept at -0.1%.
- Votes 8-1 to keep monetary policy unchanged, BOJ FY 2017 Core CPI forecast is 1.7%
- Maintains policy balance rate at -0.10%, FY2018 core CPI forecast is 1.9%.
- CPI forecasts exclude effect of sales tax increases, CPI to hit 2% target during FY 2017.
- Will add easing if necessary, expects price trends to steadily rise.
- Downside risks are high for price outlook, sees large downside risks for economic outlook.
- Japan's CPI to be around zero percent for time being, CPI will pick up its pace toward 2%.
- Japan's economy has continued moderate recovery trend, will continue easing until 2% inflation is stable.
Crude futures pulled back from 2016 highs
Crude futures pulled back from 2016 highs on Thursday as traders locked in profits after April's sharp rally, but analysts said falling U.S. production, strong investor appetite and a weakening dollar could push prices higher soon.
International Brent crude futures were trading at $46.91 per barrel at 0638 GMT, down 27 cents from their last settlement. U.S. West Texas Intermediate (WTI) futures were down 20 cents at $45.13 a barrel.
Reference: Wells Fargo, DailyFX, FXStreet, Reuters
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