In the last 24 hours, three major central banks surprised traders by staying firm and not making any changes to their monetary policies. The Federal Reserve held rates and did little to change its statement in terms of providing hints of a future interest rate hike while the Bank of Japan and the Reserve Bank of New Zealand acted the same.
• Oil and Gold: Oil prices pared gains on Wednesday after official data showed US crude oil inventories rose more than expected last week. WTI gain 3% and close above US$45. Gold climbed, rebounding to 1253 from an earlier decline, after the Bank of Japan unexpectedly held off on expanding stimulus, hurting the dollar.
• Stocks: the S&P 500 Index ended slightly higher Wednesday after the Federal Reserve left interest rates unchanged.that the Dow Jones Industrial Average and Initially, stocks had extended losses following the Fed statement only to rebound to carve out new session highs. The Dow Jones rose 51.23 points, or 0.3%, to close at 18,041.55, coming off an earlier 70-point deficit. The Nasdaq underperformed other indexes, slumping 25.14 points, or 0.5%, to finish at 4,863.14. Earlier, the Nasdaq had traded down by as many as 62 points.
• Currencies:USD/JPY briefly dropped below 109 on the announcement that BoJ stayed pat on policy and following the BoJ inaction, we see little support to the cross in the coming months. The FOMC statement was not able to rock USD crosses much last night with its ‘we are still patient’ stance despite the fact that it did in our view keep open the option of a hike.The British pound caught a fresh bid-wave in early Europe, now pushing GBP/USD to print fresh session tops above 1.456 at time of writing.