Rate Hike

Asian shares fell after investors took profits in high-flying U.S. technology shares on fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data.

The retreat came as investors braced for new Federal Reserve Chairman Jerome Powell’s first policy meeting starting later in the day and amid concerns that U.S. President Donald Trump could impose additional protectionist trade measures. In addition, worries about the potential for a trade war cast a shadow after U.S. President Trump imposed tariffs on steel and aluminium.

In the currency market, with a Fed rate rise already fully priced in, the dollar barely gained from the prospect of a rate hike. Instead it was the euro that stole the spotlight after reported that the European Central Bank officials were shifting their debate from bond purchases to the expected path of interest rates. EURUSD rose to 1.2345, bouncing back from 1.2258 hit the previous day. GBPUSD hit one-month high of 1.4088 after Britain and the European Union agreed to a 21-month post-Brexit transition period and a potential solution to avoid a “hard border” for Northern Ireland. USDJPY was little changed at 106.01, with traders wary of any new developments in a cronyism scandal that has eroded support for Japanese Prime Minister Shinzo Abe.

In commodities Oil prices barely moved as investors remained wary of growing crude supply although tensions between Saudi Arabia and Iran provided some support. Brent crude futures traded at 66.19 a barrel. U.S. West Texas Intermediate (WTI) futures were 62.16 a barrel.

The economic calendar comes with major economic event with high impact which should provide moderate to high volatility. Data coming from Switzerland’s SECO Economic Forecasts and the Balance of Trade, the Inflation Rate in UK and the ZEW Survey Figures for Germany and the Eurozone, while very important is the Consumer Confidence Reading for the Eurozone as well. There is also the second day of the G20 Finance Ministers, Central Bank Governors Meeting in Buenos Aires.