There’s a sea of red across global stock markets this morning as a poor Friday session continued into Monday’s trading with tech stocks and the FANG’s in particular looking vulnerable. The dollar continued its recent pull back but all very much in recent ranges, this was not entirely unexpected as we had little in the way of risk events yesterday ahead of what could be an explosive week for volatility. Asian markets are set to open on the back foot once again which would normally be expected to put pressure on risk trades, however with the crucial Bank of Japan announcements today we may not see as much of a reaction as normal in the Japanese stocks or the Jpy.
Today’s conclusion of the two day BOJ meeting has the potential to be the most influential in nearly two years as rumours and reports have been rife that adjustments to the current ultra-loose policy will either be made today or confirmed today with implementation further down the road. There are a few possible moves that have been suggested, from a change of yield curve control to a more conservative change in its ETF purchasing policy or just a general change of message from the Governor. Each will have a different affect on the market and it must be noted that there’s little expectation in a change of rate, but, we’ve seen strong moves in the JGB’s and Jpy over the last week or so since this news hit the market and anything more muted could see a swift reversal of those moves.
The BoJ will be the main focus of the day for investors along with any further moves across global stock markets as its’ relatively quiet on the fundamental data front today throughout the Asian and London sessions. However, the focus will shift to the Canadian market during the New York session as we are due to see the latest GDP numbers from north of the border.