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Sunrise Market Commentary

• Rates: Fed hikes rates, but markets wanted more
  The Fed raised its policy rate by 25 bps to 0.75%-1%, but the median rate projections for 2017-2019 and the long run remained broadly unchanged. While Yellen indicated that the Fed would step up its tightening pace, markets were positioned for a more hawkish message. The US yield curve shifted up to 12.5 bps lower, the belly outperforming.
• Currencies: Dollar declines as Fed hikes rates. Euro gains on Dutch election result
  The dollar ceded ground across the board after the FOMC decision. The market was apparently positioned for a more aggressive Fed signal. The euro also gained as there is no role for Wilders in the formation of a new Dutch government. How far will the post-FOMC repositioning go? We assume key USD support levels to hold.

The Sunrise Headlines

• US equities rallied after the Fed hiked rates, but without turning hawkish towards the near future. Overnight, Asian stock markets receive a boost with Japan underperforming on the back of a lower USD/JPY
• The Fed said it would raise short-term interest rates and keep lifting them this year, moving the central bank into a new, more aggressive phase of draining easy money from the financial system as the economy improves.
• The BoJ kept monetary policy on hold as it battles to reach 2% inflation. Short-term interest rates will stay at -0.1%, 10y bond yields will be capped near 0%, and asset purchases remain at about ¥80T/year
• Rutte looks certain to form the Netherlands next government, with his party projected to secure a clear victory over rivals including populist challenger Wilders. A scattered political landscape will make it hard to form a coalition.
• China's central bank has raised interbank interest rates in a move designed to limit investors' interest in moving money from China to the US following the Federal Reserve's interest rate rise overnight.
• Australia's jobless rate climbed to a 13-month high in February and employment unexpectedly fell, a risk to the outlook for wage growth and inflation that will likely keep open the possibility of another interest rate cut.
• Today's eco calendar contains final EMU CPI, US initial jobless claims, Philly Fed Business Outlook and auctions in Spain & France. The Swiss National Bank, Norges Bank and Bank of England hold policy meetings.

Currencies: Dollar Declines As Fed Hikes Rates. Euro Gains On Dutch Election Result

Dollar declines as Fed hikes policy rate

Yesterday, the dollar drifted sideways ahead of the FOMC decision. The Fed as expected raised its policy rate by 25 bps. Yellen indicated a further gradual policy normalisation as the Fed meets its objectives. The market was apparently positioned for more aggressive communication. The dollar ceded ground across the board. Later, the euro found support as the first Dutch exit-polls made clear that the populist PVV party has no role in the formation of a new government. EUR/USD closed the session at 1.0734, the highest level in more than a month. USD/JPY finished the session at 113.38 (from 114.75 on Tuesday).

Overnight, Asian markets joined the post-Fed trends from the US. The dollar holds near the recent lows. The decline of core bond yields and of the dollar supports equities. Regional indices gain about 1%. Commodities/commodity related assets perform well. Japan underperforms on USD/JPY weakness (currently in the 113.25 area). The BOJ left its policy rate (-0.1%) and the target level for the 10y government bond yield (0.0%) unchanged. The market reaction was very limited. Eco data in Australia (labour market report) and in New-Zealand (Q4 GDP) disappointed. The Aussie (AUD/USD 0.7690) and the kiwi dollar (NZD/USD 0.70 area) returned a small part of the post-Fed gains. EUR/USD hovers in the 1.0720/45 area this morning, maintaining the post-Fed gain.

Today, the eco calendar is moderately interesting. In EMU, the final February CPI will be published. In the US, the calendar is better filled with the housing starts, building permits, jobless claims and the Philly Fed business outlook. Especially the claims and the Philly Fed survey might have some intraday impact on USD trading. Claims are expected to decline slightly to 240 000. The Philly Fed is expected to decline to 30 from an extremely high 43.3. Recently, confidence indicators remained at fairly strong levels and we expect this to remain the case. The key question is whether markets will continue their soft reaction to the Fed's communication. We are a bit surprised by the substantial decline of US bond yields, even as Yellen suggested that, considering the eco developments, the Fed policy might be relatively close to the 'dot-path'. The Fed also didn't assume much fiscal easing in its assessment. The day-to-day momentum is USD negative, but if US eco data remain OK, the correction doesn't have to go far. EUR/USD might still feel some support from the outcome of the Dutch elections this morning, but we assume that this effect will peter out very soon

EUR/USD 1.0874 resistance remains the line in the sand with intermediate resistance at 1.0829. We maintain the view that a sustained break of EUR/USD above this area will be difficult, even after yesterday's Fed message. The US/German (EMU) interest rate differential remains at an absolute high level. Especially at the short end of the curve, the differential might even re-widen after yesterday's easing. The fundamentals/interest rate differentials are in theory also supportive for USD/JPY, but of late the momentum/technical picture was not really convincing. We maintain the working hypothesis that the 111.60 range bottom should hold.

EUR/USD rebounds on after FOMC decision and on pro-European outcome of Dutch elections

EUR/GBP

BoE to keep wait-and-see approach

Yesterday, sterling showed again some sharp swings at the onset of the European session. This time, the UK currency jumped higher, without an obvious driver. Mid-morning, the UK labour market report was fairly strong but sterling traders focused on disappointing wage growth. Sterling reversed part of the earlier gains against the euro and the dollar. After the Fed decision, sterling mostly followed the USD moves. Cable rebounded to the 1.23 area. EUR/GBP didn't profit much from the rise in EUR/USD. The pair closed the session at 0.8733.

Today, the BOE will announce its policy decision and published the meeting minutes. No policy change is expected. Given the recent softening in some UK data, ongoing modest price rises and the Brexit negotiations coming closer, the BOE will feel comfortable with its wait-and-see approach. In theory, this is modestly sterling negative. However, the recent price action suggest that the recent decline of sterling needs a breather. So, we don't expect the BoE meeting to change the broader picture for sterling for the better. Sterling sentiment softened of late. EUR/GBP cleared the 0.8592 resistance, which improved the technical short-term EUR/GBP picture. We don't expect a sustained EUR/USD rebound , but a combination of temporary euro consolidation and ongoing sterling softness as the Brexit negotiations are nearing, might trigger some more ST EUR/GBP gains. The 0.8854 correction top is the next key resistance. The nervous swings over the previous days suggest that a clear break beyond 0.8854 will be difficult without important news.

EUR/GBP; sterling shows some nervous swings as formal start of Brexit procedure is nearing

Download entire Sunrise Market Commentary

Short term Elliott Wave view in EURJPY suggests that the decline to 118.18 on 2/24 ended Primary wave ((4)). Primary wave ((5)) is currently in progress higher and the rally from Primary wave ((4)) low at 118.18 is unfolding as an ending diagonal Elliott wave structure where Intermediate wave (1) ended at 122.88. The subwaves of Intermediate wave (1) takes the form of a zigzag Elliott wave structure where Minor wave A ended at 121.19, Minor wave B ended at 119.97, and Minor wave C of (1) ended at 122.88.

Intermediate wave (2) pullback is unfolding as as a double three structure where Minor wave W ended at 121.59, Minor wave X ended at 122.06 and Minor wave Y of of (2) is proposed complete at 121.16. While pullbacks stay above there, and more importantly above 118.18, expect pair to resume the rally higher, provided that pivot at 118.18 stays intact. If pair breaks below 121.16 here, then it’s still within Minor wave Y of (2) and can open extension lower towards 120.45 – 120.75 area before pair turns higher again. We don’t like selling the proposed pullback and favor the longside as long as pivot at 118.18 low stays intact.

EURJPY 1 Hour Chart

For the 24 hours to 23:00 GMT, the AUD rose 1.89% against the USD and closed at 0.7701.

LME Copper prices rose 1.8% or $103.0/MT to $5850.0/MT. Aluminium prices rose 0.7% or $12.0/MT to $1863.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.768, with the AUD trading 0.27% lower against the USD from yesterday's close, after the release of a downbeat Australian jobs report.

Early morning data indicated that Australia's seasonally adjusted unemployment rate rose to 5.9% in February, hitting its highest level in thirteen months, as the total number of people with jobs fell by 6.4K last month, while the market forecasted a rise of 16.0K. The unemployment rate was expected to remain steady at 5.7%. Further, the nation's consumer inflation expectations advanced 4.0% in March, compared to a gain of 4.1% in the prior month.

The pair is expected to find support at 0.7588, and a fall through could take it to the next support level of 0.7495. The pair is expected to find its first resistance at 0.7746, and a rise through could take it to the next resistance level of 0.7811.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 1.15% against the USD and closed at 1.0730, after Dutch election exit polls suggested that the country's Prime Minister, Mark Rutte's Liberals were on course for a resounding victory over anti-Islam and anti-EU Geert Wilders, thus easing concerns of a wave of populism in the currency bloc.

The greenback nursed losses against its key peers, following a less hawkish policy statement by the US Federal Reserve (Fed), since it did not suggest an acceleration in the pace of interest rate hikes as some experts had predicted.

The US Fed, at its latest monetary policy meeting, lifted the key interest rate by a quarter-point to a range of 0.75% to 1.0%, a move prompted by steady economic growth, improving labour market and a recent uptick in inflation. In a post-meeting statement, the Fed Chairwoman, Janet Yellen, did not signal an intent to increase rates more than three times this year and stressed that the central bank remains data-dependent. However, decision-makers see slightly faster pace of interest rate hikes in 2019, while projections for 2018 and the longer-run remain unchanged. Meanwhile, officials maintained the US economic growth forecast at 2.1% for 2017, but slightly raised the projection to 2.1% from 2.0% for 2018.

Ahead of the rate announcement, investors had been met by a raft of economic releases. The US consumer price index (CPI) recorded an unexpected rise of 0.1% on a monthly basis in February, confounding market expectations for a flat reading. In the prior month, the CPI had registered a rise of 0.6%.

Meanwhile, on an annual basis, the CPI advanced 2.7% in February, in line with market expectations and following a gain of 2.5% in the prior month. Moreover, the nation's advance retail sales rose 0.1% on a monthly basis in February, recording its smallest increase in six months. Advance retail sales had registered a revised rise of 0.6% in the prior month. Also, the nation's NAHB housing market index surprisingly jumped to a level of 71.0 in March, surging to its highest level in almost twelve years, amid actions on regulatory reforms by the US President. Markets anticipated the index to remain steady at a level of 65.0.

In other economic news, the US business inventories rose 0.3% in January, meeting market expectations and following a rise of 0.4% in the prior month. Further, the nation's mortgage applications increased 3.1% in the week ended 10 March 2017, after recording a gain of 3.3% in the prior week.

In the Asian session, at GMT0400, the pair is trading at 1.0721, with the EUR trading 0.08% lower against the USD from yesterday's close.

The pair is expected to find support at 1.0636, and a fall through could take it to the next support level of 1.0551. The pair is expected to find its first resistance at 1.0776, and a rise through could take it to the next resistance level of 1.0831.

Going ahead, investors will focus on the Euro-zone's CPI data for February, scheduled to release in a few hours. In the US, housing starts and building permits, both for February, coupled with initial jobless claims data, will keep investors on their toes. Market participants will also have their eyes on the Trump administration's fiscal 2018 federal budget plan, due later today.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 1.13% against the USD and closed at 1.2288, after UK's ILO unemployment rate surprisingly dropped to 4.7% in the November-January 2017 period, reaching its lowest level since 1975, while markets anticipated it to remain steady at 4.8%.

However, the nation's average earnings including bonus advanced less-than-expected by 2.2% on an annual basis in the three months ended January, underlining concerns that consumer spending will be eroded as inflation rises and making it more unlikely that the Bank of England will hike interest rates in the near term. Investors had envisaged average earnings to rise 2.4%, following a gain of 2.6% in the October-December 2016 period.

In the Asian session, at GMT0400, the pair is trading at 1.2262, with the GBP trading 0.21% lower against the USD from yesterday's close.

The pair is expected to find support at 1.2173, and a fall through could take it to the next support level of 1.2085. The pair is expected to find its first resistance at 1.2329, and a rise through could take it to the next resistance level of 1.2397.

Trading trends in the GBP today are expected to be determined by the Bank of England's interest rate decision, scheduled later today. Markets broadly expect the central bank to keep monetary policy unchanged.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 1.09% against the JPY and closed at 113.43.

In the Asian session, at GMT0400, the pair is trading at 113.43, with the USD trading flat against the JPY from yesterday’s close.

Earlier in the session, the Bank of Japan (BoJ) opted to leave the benchmark interest rate steady at -0.1% and pledged to guide the 10-year government bond yield at around 0.0%. Also, the pace of annual asset purchases remained unchanged at about ¥80.0 trillion. The central bank further indicated that it will continue with quantitative and qualitative monetary easing with yield curve control, aiming to achieve the price stability target of 2.0%.

The pair is expected to find support at 112.75, and a fall through could take it to the next support level of 112.06. The pair is expected to find its first resistance at 114.50, and a rise through could take it to the next resistance level of 115.56.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.88% against the CHF and closed at 1.0004.

On the macro front, Switzerland's producer and import price index unexpectedly dropped 0.2% on a monthly basis in February, compared with an advance of 0.4% in the prior month, whereas markets were expecting the index to climb 0.4%.

In the Asian session, at GMT0400, the pair is trading at 0.9998, with the USD trading 0.06% lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9953, and a fall through could take it to the next support level of 0.9907. The pair is expected to find its first resistance at 1.0071, and a rise through could take it to the next resistance level of 1.0143.

Ahead in the day, all eyes will be on the Swiss National Bank's (SNB) interest rate decision.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 1.36% against the CAD and closed at 1.3297.

In economic news, Canada's existing home sales advanced 5.2% MoM in February, hitting its highest level since April 2016. In the prior month, existing home sales had registered a drop of 1.3%.

In the Asian session, at GMT0400, the pair is trading at 1.3308, with the USD trading 0.08% higher against the CAD from yesterday's close.

The pair is expected to find support at 1.3233, and a fall through could take it to the next support level of 1.3157. The pair is expected to find its first resistance at 1.3431, and a rise through could take it to the next resistance level of 1.3553.

In the absence of any relevant economic releases in Canada today, investor sentiment would be governed by global macroeconomic events.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

BOJ maintains policy stance with more upbeat view of longer-run inflation

Asia Mid-Session Market Update: BOJ maintains policy stance with more upbeat view of longer-run inflation; Australia employment, New Zealand GDP miss expectations

US Session Highlights

(US) MAR EMPIRE MANUFACTURING: 16.4 V 15.0E; new orders 21.3 v 13.5 prior

(US) FEB ADVANCE RETAIL SALES M/M: 0.1% V 0.1%E; RETAIL SALES EX AUTO M/M: 0.2% V 0.1%E; Control Group revised higher from 0.4% to 0.8%

(US) FEB CPI M/M: 0.1% V 0.0%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 243.603 V 243.416E

(US) MAR NAHB HOUSING MARKET INDEX: 71 V 65E (highest since June 2005)

(US) JAN BUSINESS INVENTORIES: 0.3% V 0.3%E

(US) FOMC RAISES FED FUNDS TARGET RANGE 25BPS TO 0.75-1.00% (AS EXPECTED); ECONOMIC CONDITIONS WILL EVOLVE IN WAY THAT WARRANTS GRADUAL INCREASES

US markets on close: Dow +0.5%, S&P500 +0.8%, Nasdaq +0.7%

Best Sector in S&P500: Energy

Worst Sector in S&P500: Financials

Biggest gainers: SWN +5.8%, NEM +5.3%, FCX +5.1%, HOG +4.7%, RIG +4.6%

Biggest losers: M -2.0%, COF -2.0%, AZO -1.7%, ORLY -1.7%, DFS -1.6%

At the close: VIX 11.6 (-0.7 pts); Treasuries: 2-yr 1.31% (-7bps), 10-yr 2.51% (-9bps), 30-yr 3.11% (-7bps)

US movers afterhours

ALRM: Reports Q4 $0.19 adj v $0.13e, R$69.8M v $64.0Me; +9.0% afterhours

GPRO: Affirms Q1 revs at upper end of $190-210M v $199Me; +8.8% afterhours

FRSH: Reports Q4 $0.09 (*incl benefit) v $0.01e, R$35.5M v $39.2Me; Guides initial FY17 SSS flat to +2%; +8.7% afterhours

ORCL: Reports Q3 $0.69 v $0.62e, R$9.21B v $9.24Be; Raises dividend 27% to $0.19/shr (implied yield 1.8%); +5.9% afterhours

KCG: Confirmed that it has received an unsolicited proposal from Virtu Financial for $18.50-20.00/shr in cash; +4.7% afterhours

WSM: Reports Q4 $1.55 v $1.50e, R$1.58B v $1.61Be; Increases dividend 5% to $0.39/shr (implied yield 3.2%); +3.4% afterhours

TSLA: Announces offerings of $250M Common Stock (0.6% of market cap) and $750M Convertible Senior Notes (1.8% of market cap); CEO Musk to purchase $25M of common stock; +2.1% afterhours

JBL: Reports Q2 $0.48 v $0.45e, R$4.45B v $4.36Be; -1.8% afterhours

GES: Reports Q4 $0.41 v $0.45e, R$679M v $689Me; Guides Q1 -$0.33 to -$0.30 v +$0.16e; -12.5% afterhours

Politics

(US) Hawaii judge blocks President Trump's second travel ban saying likely a violation of First Amendment protections

(US) House Speaker Ryan: Working on improving and refining the Republican healthcare bill - press

(US) Pres Trump's proposed budget plan said to cut EPA funds by 31% and State Dept by 28% - NY Times

(US) Trump Administration say it plans to rescind the Bureau of Land Management (BLM) Fracking rule on public lands with US Circuit Court of Appeals in 10th district - press

(NL) Netherlands election results (1st exit poll): PM Rutte's VVD party wins the most seats with 31 out of 150 in the lower house; Wilders' PVV wins 19 seats - Ipsos

Asia Key economic data:

(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Maintains 10-yr JGB yield target around 0%

(AU) AUSTRALIA FEB EMPLOYMENT CHANGE: -6.4K (first decline in 5 months) V +16.0KE; UNEMPLOYMENT RATE: 5.9% (13-month high) V 5.7%E

(AU) AUSTRALIA MAR CONSUMER INFLATION EXPECTATION: 4.0% V 4.1% PRIOR (3-month low)

(NZ) NEW ZEALAND Q4 GDP Q/Q: 0.4% V 0.7%E; Y/Y: 2.7% V 3.2%E

Asia Session Notable Observations, Speakers and Press

FOMC raised Fed Funds target range by 25bps as had been widely expected, but the outlook of the accompanying statement and Fed Chair Yellen press conference were perceived to be less hawkish. Median forecast for this year remained at 1.375%, implying 2 more hikes and reversing hints of markets anticipating a potential 4th hike. 2018 median forecast was also left unchanged with 3 more hikes, as the Fed judgednear-term outlook as "roughly balanced" and market-based inflation compensation remaining low. In the Q/A, Fed Chair Yellen said current policy setting is still below the current 'neutral' rate, but it's not that far below it.

Bonds rallied on the statement, with benchmark 10-year falling to 1-week low around 2.5%. USD was also weaker across the board, particularly in USD/JPY as it fell as much as 140pips below 113.20. EUR/USD rose about 50pips above 1.0740, also helped by weaker showing for euroskeptic party in the Dutch elections, where PM Rutte's party took 31 seats vs populist Wilders' 19 seats.

New Zealand Q4 GDP missed expectations, as consumption and capital formation growth slowed markedly from Q3 levels to 0.4% v 1.6% prior and 0.7% v 2.5% prior respectively. Analysts noted the undershoot in growth has pushed back OIS probability of the first RBNZ hike to early 2018 from late 2017. NZD/USD also fell some 40pips to $0.70 on the release.

Australia's employment figures fared poorly, with the first negative print in 5-months. Unemployment also rose to reach 13-month highs as participation rate remained unchanged. Aussie 3-year bond yield was down a whopping 10bps in the wake of US bond rally and soft employment data, while AUD/USD pared its post-FOMC spike to 0.7720 to fall back to 0.7680.

PBOC also eased off the monetary accommodation in the wake of the Fed decision, raising rates on its reverse repo operations by 10bps while also conducting 6-mo and 1-yr MLF operation at yields 10bps above prior. China central bank said the steps do not represent a shift in policy, but rather reflect changes in markets, firmer domestic economy, and strong credit expansion. PBoC also strengthened Yuan in its daily fix by the biggest margin since mid-January.

Last risk event of the session - the BOJ decision - was perhaps the least volatile. Bank of Japan held its IOER rate at -0.1%, maintained the slope in the Yield Curve Control with 10-yr target of 0%, kepts its JGB buying target unchanged at about ¥80T per year, and maintained its overall assessment of economy continuing moderate recovery trend. The most notable changes was a downgrade to Housing investment component of its assessment (flat vs picking up) and a more hawkish view of medium-term inflation rising toward 2% as "output gap improves and inflation expectations rise." USD/JPY saw a brief ripple with a 15pip rise to 113.50 on the release but quickly erased those gains.

China

(CN) China CBRC Chairman Guo Shuqing: China needs to crack down on debt evasion

Japan

(JP) Japan Automobile Manufacturers Association (JAMA) sees FY17 Japan auto demand at 5M units, -0.8% y/y

(JP) Japan Chief Cabinet Sec Suga: To monitor interest rates in US after today's Fed decision; Rate hike is not bad for Japan and global economy

(JP) Japan Fin Min Aso: have to have free trade; will explain Abenomics 3 arrows at G20

Australia

(AU) UBS: Australia bonds are attractive even if AAA rating is cut - press

(NZ) Swaps markets have pushed back odd-on timeframe for RBNZ rate hike to Jan 2018 from Dec 2017 following lower than expected Q4 GDP - press

Korea

(KR) South Korea Defense Ministry Official: THAAD system is for self defense only against threat from North Korea - press

(KR) Bank of Korea (BOK) Will stabilize markets on excessive movements; closely monitoring financial market movement after the Fed

(KR) South Korea vice Fin Min Choi: To continue to monitor markets; Prepared to take action to stabilize markets if needed - press

Asian Equity Indices/Futures (00:15ET)

Nikkei -0.2%, Hang Seng +1.3%, Shanghai Composite +0.7%, ASX200 +0.2%, Kospi +0.5%

Equity Futures: S&P500 +0.2%; Nasdaq +0.2%; Dax +0.6%; FTSE100 +0.2%

FX ranges/Commodities/Fixed Income (00:15ET)

EUR 1.0720-1.0745 JPY 113.15-113.55; AUD 0.7680-0.7715; NZD 0.6990-0.7045

Apr Gold +2.0% at $1,225/oz; Apr Crude Oil +0.6% at $49.14/brl; May Copper +0.3% at $2.68/lb

SPDR Gold Trust ETF daily holdings rise 4.4 tonnes to 839.4 tonnes; 3rd straight increase; highest since Mar 3rd

(CN) PBoC conducts CNY303B 1-yr Medium-term Lending Facility (MLF) at 3.2% (prior 3.1%)

(CN) PBOC to inject combined CNY80B v CNY60B prior in 7,14, and 28-day reverse repos; raises all offer yields by 10bps

(CN) PBOC SETS YUAN MID POINT AT 6.8862 V 6.9115 PRIOR; Biggest CNY increase since Jan 18th; Strongest Yuan setting since Mar 6th

(AU) Australia 3-yr govt bond yield extending decline to 2.00% following employment data; 1-week low

(NZ) New Zealand sells NZ$200M 2025 bond, bid-to-cover ratio: 7.12x

Asia equities/Notables/movers by sector

Consumer discretionary: 1910.HK Samsonite +4.7% (FY16 result); 670.HK China Eastern Airlines +2.0% (Feb result); MYR.AU Myer -4.7% (H2 sales )

Consumer staples: 2218.HK Yantai North Andre Juice Co +0.7% (FY16 result)

Financials: 993.HK Huarong International Financial Holdings -1.4%

Industrials: 3369.HK Qinhuangdao Port -0.5% (FY16 result); 1812.JP Kajima Corp +1.5% (raises guidance)

Technology: 268.HK Kingdee International Software Group -2.2% (FY16 result); 005930.KR Samsung Electronics +1.5% (iPhone 8 OLED screen made by Samsung speculation); 066570.KR LG Electronics -0.6% (BNP Paribas raises rating); 6502.JP Toshiba Corporation -2.5% (offers chip unit share as loan collateral); 6773.JP Pioneer Corp -2.0% (Deutsche Bank cuts rating)

Materials: Newcrest Mining NCM.AU +0.9%, St Barbara SBM.AU +6.5%, Evolution Mining EVN.AU +4.9% (gold price rises); 338.HK Sinopec Shanghai Petrochemical Co 3.0% (FY16 result); TAW.AU Tawana Resources +5.9% (Metallurgical Test Work results)

Energy: 991.HK Datang International Power Generation -0.9% (FY16 result), STO.AU Santos +4.8% (Credit Suisse raises rating)

Telecom: 762.HK China Unicom +4.3% (FY16 result)

Currency pair EUR/USD

Investors and traders were looking for a direction from the Federal Reserve (Fed) yesterday regarding the potential path of interest rate hikes during 2017. The Fed indicated that it expects 3 rate hikes during 2017, which seems to match expectations of the market.

Despite the interest rate increase from 0.75% to 1%, the US Dollar declined against other major currencies. The rate increase seemed to have already been priced. Another contributing factor was the lack of an even stronger hawkish tone (more rate hikes) in the meeting minutes from the Fed.

The EUR/USD found support after the Fed news event, which has been labelled as a wave B (blue) in a larger ABC (blue) correction. The wave 2 (purple) is now approaching a key 78.6% Fibonacci resistance level. A break above the 100% level remains the invalidation point for the larger daily bearish trend.

Currency pair GBP/USD

The GBP/USD also showed a bullish bounce just as the EUR/USD. Price has now reached a potential resistance zone with Fibs and a trend line (orange). A break above the 61.8% makes a wave 4 (blue) unlikely.

The GBP/USD broke above resistance (dotted red) and invalidated yesterday's wave 4. A larger ABC (pink) zigzag seems to be taking place. A break below the support lines (blue/green) could indicate a bearish breakout but for the moment one more push higher is possible within wave 4-5 (purple).

Currency pair USD/JPY

The USD/JPY seems to have completed a wave 4 (purple) at a shallow Fibonacci level from the daily-weekly charts, which makes a larger uptrend more likely. The uptrend stays intact if price manages to stay above the 100% Fibonacci level of wave 2 (blue/brown).

The USD/JPY broke below the support trend line (dotted green) and expanded the bearish correction.