- Dollar Gains on Fed Confidence. The U.S. dollar surged higher on Wednesday after the Federal Reserve signaled confidence the U.S. economic recovery remained on track while investors started to bet on an interest rate increase sooner than previously expected. Language in the Fed's statement largely dismissed recent financial market volatility and focused on gradually improving labor markets. The Fed however didn't change its benchmark interest rate but did end its monthly bond purchase program.
- Sterling Subdued by Dovish BoE Comments.Sterling retreated from the previous day's 1-week high against the dollar after yet another Bank of England policymaker said interest rates would stay lower for longer. While data on Wednesday showed British lenders approved the fewest mortgages in more than a year last month, adding to evidence that housing market activity is moderating. Sterling was weighed down by comments from Bank of England Deputy Governor Jon Cunliffe, who said on Tuesday the central bank could leave rates near their record low for longer than first thought.
- Rupiah Jump After Brodjonegoro Flags Fuel-Price Increase. The Indonesian rupiah jumped the most in more than a week after Finance Minister Bambang Brodjonegoro said the government will probably raise subsidized-fuel prices before the end of the year. The size and timing of the adjustment hasn’t been decided yet, Brodjonegoro said in an interview in Jakarta, adding that he will recommend a fixed-subsidy system. Some 276 trillion rupiah ($23 billion) has been set aside for fuel subsidies in the 2015 budget, or 13.5% of total spending.
- Fed Ends QE3 and Sends Upbeat Signals on Economy. The Federal Reserve voted to end its bond-buying stimulus program commonly known as QE3 and sent several upbeat signals to markets that it was not worried about global weakness, low inflation or a wobble in financial markets. In the statement, the Fed left unchanged its pledge that rates would remain near zero for a “considerable time.” But it qualified the statement, saying that if the economy improves faster than expected, than the first rate hike could come sooner than anticipated.
- Asian Shares Rebound on Earnings Optimism, The Fed Results. Asian equity markets advanced on Wednesday, helped by Wall Street which gained on optimism over corporate earnings and prospects the U.S. Federal Reserve will no hurry to take policy tightening a step further. Japanese stocks rose 1.46 percent to a three-week high on Wednesday, buoyed by hopes that the U.S. Federal Reserve will reiterate its willingness to wait some time before hiking interest rates and by stronger-than-expected domestic industrial data. While South Korean shares also rallied to a fresh 3-week high on Wednesday, buoyed by expectations that the U.S Federal Reserve will take a dovish stance regarding the timing of its next interest rate hike. The KOSPI index soared 1.84 percent, it's highest since October 8, with shares in LG Electronics surged 4.3 percent and Samsung Heavy Industries shares jumped 7.1 percent. The Hang Seng Index closed up 1.27 percent, tracking strength in China markets, on anticipation the Federal Reserve will reinforce signals that it could be a long time before U.S. interest rates rise.
- Europe Closes Mixed as Fed Eyed. European shares closed mixed on Wednesday, after a bumpy day of trading, as investors looked ahead to the much-anticipated U.S. Federal Reserve's policy statement. Minutes from the last meeting, when the Fed pledged to keep interest rates low for a considerable time, revealed officials’ concern that U.S. growth may be at risk from a global slowdown. Germany’s DAX Index rose 0.16 percent to 9082.81, France’s CAC 40 Index lost 0.05 percent to 4110.64, and the U.K.’s FTSE 100 Index jumped 0.81 percent to 6453.87
- U.S. Stocks Slip after Fed Statement. U.S. stocks declined after the Federal Reserve confirmed it will end its asset-purchase program, indicating the U.S. economy is on a stable growth path. The Fed retained its commitment to keep interest rates low for a “considerable time” as it ended a two-day policy meeting. Officials said labor market conditions “improved somewhat further,” and that a range of indicators suggests that “underutilization of labor resources is gradually diminishing,” modifying earlier language that referred to “significant underutilization.” The Fed also saying that if the economy improves faster than expected, than the first rate hike could come sooner than anticipated. The Dow Jones Industrial Average ended at 16,974.31, down 31.44 points, or 0.2 percent. The S&P 500 dropped 2.75 points, or 0.1 percent, to 1,982.30. The Nasdaq declined 15.07 points, or 0.3 percent, to 4,549.23.
- Gold Drops as Fed Ends QE. Gold prices tumbled on Wednesday after the Federal Reserve ended its two-year-old bond-buying stimulus, known as quantitative easing, as the U.S. economy gathers momentum. The central bank also signaled confidence the U.S. economic recovery would remain on track despite signs of a slowdown in many parts of the global economy. Gold has benefited from the low interest rates and increased liquidity that have dominated Fed policy in the years after the 2008 financial crisis.
- WTI Gains as Supply Grows Less Than Expected. West Texas Intermediate gained for a second day after an Energy Information Administration report showed growth in U.S. inventories slowed. U.S. crude inventories rose 2.1 million barrels in the seven days ended Oct. 24, well below analysts' expectation of a 3.4-million-barrel increase, according to the U.S. government's Energy Information Administration. The EIA also reported that gasoline inventories fell 1.24 million to 203.1 million and distillate fuel, including diesel and heating oil, dropped 5.29 million to 120.4 million. Analysts expected a decline of 900,000 for gasoline and 1.4 million barrels for distillate.
- Ralph Lauren Beats Profit Expectations. Ralph Lauren, the apparel and accessories maker, posted better-than-expected fiscal second-quarter earnings, but sales miss and give a downbeat outlook for the current quarter. Earnings for the quarter ended Sept. 27 came in at $201 million, or $2.25 a share, compared with $205 million, or $2.23 a share, in the year-earlier period. Analysts surveyed by FactSet were expecting, on average, earnings per share of $2.05. Revenue rose to $1.99 billion from last year's $1.87 billion, but fell shy of analyst forecasts of $2.02 billion. The company expects current quarter revenue to rise 3% to 5% above year-earlier levels, while FactSet's estimate of $2.18 billion implies 8.1% growth.
- Facebook User Growth May Be Slowing. Facebook Inc. investors are getting jittery about what could be seen as some deceleration in its previous unstoppable user growth, in addition to its hefty spending. The company’s outlook for revenue growth of 40% to 47% in the fourth quarter was also likely causing some concerns. In the fourth quarter of 2013, Facebook’s revenue jumped 63% to $2.59 billion. Earlier, Facebook reported third quarter earnings that beat Wall Street’s expectations. But the company’s user data was causing concern among some investors. Facebook said that its monthly active users (MAUs) were 1.35 billion as of September 30, 2014, up 14% from a year ago, but up only modestly from the June quarter of 1.32 billion.
· EUR/USD. The bias is neutral in nearest term with potential trading range seen between 1.2620 – 1.2900 area. Another consistent break above 1.2900 area would trigger further bullish correction scenario retesting 1.2940 region. On the downside, only a clear break back below 1.2620 area would continue the major bearish trend aiming 1.2520 key support area.
· GBP/USD. The bias is neutral in nearest term with potential trading range seen between 1.6000 – 1.6090 area, another consistent break above 1.6090 area would trigger bullish correction scenario aiming 1.6190 region. On the downside, only a clear break back below 1.6000 area would continue the major bearish scenario retesting 1.5950 support area.
· USD/JPY. The bias is bullish in nearest term especially if price able to make a clear break above 109.00 area to trigger further bullish momentum targeting 109.35 resistance area. On the downside, only a clear break back below 108.40 area would trigger bearish correction scenario retesting 108.10 area before recovery to the upside.
· USD/CHF. The bias is bullish in nearest term especially if price able to make a clear break above 0.9565 area to trigger further bullish momentum aiming 0.9590 area. Immediate support is seen around 0.9510 area, another consistent break below that area would bring the price to neutral zone as direction would become unclear in nearest term perhaps retesting 0.9465 region.
· AUD/USD. The bias is neutral in nearest term, a clear break above 0.8830 area is needed to trigger bullish momentum aiming 0.8880 region. Immediate support is seen around 0.8770 area, another consistent break below that area would bring the price down testing 0.8725 area, before recovery to the upside.
· XAU/USD. The Bias is bearish in the nearest term testing 1206 area. A clear break below that area is needed to trigger further bearish momentum to test 1200 area, before aiming 1195 area. However, a failure break below 1206 area would bring the price up as stochastic indicator is in oversold region. A consistent break above 1221 area would give a boost to the price testing 1228 area.
· Hang Seng Futures. The bias is bullish in the nearest term targeting 24030 area. A clear break above that area is needed to trigger further bullish momentum testing 24180 area. On the downside, immediate support is seen around 23700 area, a consistent break and movement below that area would bring the price down, potentially testing 23520 area.
· Nikkei Futures. The bias is bullish in the nearest term testing 15640 area. A clear break above that area should trigger further bullish momentum to test 15750 area. How ever, a failure to break above 15640 would correct the price to 15450 as stochastic indicator is in overbought region. A consistent break below that area would bring back the bias into neutral, potentially testing 15360 area.
· Kospi Futures. Bias is neutral in nearest term to stay above 248.55 area or testing 253.55 area. Break back to below 248.55 area should restore the bearish momentum to target support at 245.20 area. Meanwhile, break above 252.55 area should confirm bullish outlook to test next resistance area around 257.55 region.