ASIA-PAC MID-SESSION UPDATE: Asia trades indecisive as the region and central banks react to the Fed

Asia equity markets are mixed as the region digests a dovish-perceived hike from the Fed under Yellen’s last meeting, as well as the latest Chinese data releases. ASX 200 (+0.2%) is positive with strength in mining stocks keeping the index afloat, while Nikkei 225 (Unch.) is hampered by USD/JPY woes post-FOMC. Hang Seng (-0.3%) and Shanghai Comp. (-0.3%) trade subdued as participants mull over Chinese Industrial Production and Retail Sales figures which either printed inline or below estimates. Furthermore, the HKMA and PBoC reacted to the FOMC with the base rate in Hong Kong raised by 25bps in lockstep with the Fed, while the PBoC increased rates by 5bps on 1-year MLF loans and on its Reverse Repo operations.

In FX markets, the greenback remains weak against its major counterparts after yesterday’s US Core CPI miss and in the absence of any hawkish surprises from the FOMC where Fed’s Evans and Kashkari both dissented, while the rate path trajectory was also kept broadly the same despite the fiscal stimulus being incorporated into forecasts. As such, EUR/USD and GBP/USD trade around post-FOMC highs after having reclaimed the 1.1800 and 1.3400 handles respectively, while USD/JPY languishes at a sub-113.00 level. Elsewhere, AUD outperforms with AUD/NZD up by 80 pips for the session on a stellar jobs report with Australian Employment Change increasing by 61.6K vs. Exp. 19.0K.

Finally, 10yr JGbs saw a mild uptick amid a subdued risk tone in Japan, although gains are only minimal as participants also await a 20yr auction later.

14 Dec 2017 - 02:51- Important- Source: RANsquawk

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