By Rhys Miles
As expected the US FOMC left the Fed fund rate unchanged at 1.50-1.75%. Citing moderate growth, a strong labour market and low inflation, the vote was unanimous. Interestingly the Fed statement made no mention of the coronavirus. The market reaction was muted with US equities finishing flat after being up at one point half a percent courtesy of some solid earnings reports from Apple and General Electric. Boing’s results were bad but not as bad as expected. US Pending home sales were softer than expected with the US trade deficit coming in at -USD 68.3 BIO.
Yesterday our CPI was slightly better than expected and the AUD enjoyed a brief 20 point rally before falling again and opening up today exactly where we opened yesterday. The annualised CPI result of 1.80% was enough for the market probability of a Feb rate cut from the RBA to now be as low as 10% when two weeks ago it was at 52%.
The European parliament voted 621-49 in favour of Boris Johnson’s Brexit deal clearing the way for the UK to leave the EU on 31st January.
The World Health Organisation is reportedly considering whether to issue a global alarm after the number of coronavirus cases in China surpassed 6,000 with 132 deaths, exceeding the official number of SARS infections during that outbreak previously.
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