Markets pause for breath after Fed minutes


Equities down, yen up

The minutes of the FOMC last December confirmed that the Fed discussions adopted a more dovish tone, recognizing the growing headwinds facing the US economy, and promised a more cautious, patient approach to further rate hikes this year.

Given the dovish rhetoric we’d already heard from Fedspeakers, this came as no real surprise to the markets and as such the Asian session saw some profit-taking after a good run higher. All indices were lower with magnitudes ranging from -0.09% for the China50 index to -0.45% for the Australia200 CFD.

The yen was bid across the board as equity markets slid, with USD/JPY dropping 0.26% to 107.88 and EUR/JPY down 0.03%. AUD/JPY suffered more as a result of yen buying and Aussie selling. It fell 0.15% to 77.44.


A confusing state of affairs? NO!!


China inflation numbers fall

Inflation in China looks as if it becoming less of a problem for the central bank, with December CPI coming in at +1.9% y/y, lower than November’s 2.2% and below economists’ forecasts of a 2.1% gain. The drop in producer prices was more pronounced, with the index rising 0.9% y/y. That’s the slowest annual increase since 2016.

There wasn’t much reaction in the markets as the broader profit taking theme dominated. USD/CNH hit a near 4-1/2 month low of 6.7918 on the day.


USD/CNH Daily Chart

Source: OANDA fxTrade


Fedspeak continues

Hot on the heels of yesterday’s Fedspeak overload, we have another four speakers today (one a repeat from yesterday). Powell, Bullard, Evans and Clarida are all on tap and are expected to affirm the dovish tone of the minutes and previous speakers.

Aside from the Fed speakers, the minutes of the last ECB meeting will be released along with the Bank of England’s credit conditions survey.


The full MarketPulse economic calendar can be viewed at



This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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