US stock indices finished the day in the black after Fed minutes confirmed the dovish view on policy from the FOMC for 2019. It had been another mixed day in the market with investors still searching for the next push one way or the other and the majority of products are trading at familiar levels on the Asian open this morning. The dollar edged lower over the day, Dxy at 96.90, after experiencing some volatility on the ECB meeting when Euro dipped then recovered but on the whole currencies were relatively stable. The pound as usual probably has the greatest propensity to move as tomorrows Brexit deadline looms and EU leaders continue to debate what kind of extension they would like to propose. Oil continues to hold to levels near recent highs and Gold continues to grind higher.
Traders continue to operate in a ‘wait and watch’ mode as they look for the next opportunity in a cautious market. Two big event risks are now behind us with the ECB and Fed both going largely to plan but providing little in the way of volatility. Once again sterling traders are probably the most on edge as Brexit approaches it’s latest deadline and the EU appears to be pushing back against the UK’s request for a short extension. The dynamic in the market has changed now in that a longer extension will probably see more pressure on the pound as this will increase the risk of further political instability in the UK, possibly leading to a leadership change, a general election or a second referendum.
Looking ahead to today’s trading and the main focus of the Asian session will be the latest release of the Chinese CPI and PPI data. The London session will be dominated by Brexit commentary yet again and there is little in the way of data releases to interrupt this. Into the New York open and traders will be looking closely at the latest PPI numbers out of the US before a raft of FOMC members hit the news wires including Clarida, Williams and Bullard.