The dollar is a touch weaker against the euro as markets enter into an eventful day. Comments from Fed officials suggested that Fed could refrain from tapering the asset purchase for a while. St. Louis Fed Bullard noted that inflation is "pretty low" in the U.S., and that he "can't envision a good case to be made for tapering" unless inflation is turning around. He noted that the Fed should be willing and ready to change the pace of asset purchase, but the Fed is not there yet. New York Fed Dudley said he's still unsure whether the Fed should reduce or raise the amount of asset purchases due to the uncertain economic outlook. There should be sufficient evidence on "prospect for substantial improvement in the labor market outlook" when the Fed slows down the pace. Main focus will be on Chairman Bernanke's testimony before the Joint Economic Committee of Congress today. The Fed is also slated to release FOMC meeting minutes.
The BoJ left its policy unchanged today. With unanimous vote, BoJ maintained the pledge to increase monetary base at annual pace of JPY 60T to JPY 70T. Interest rate was kept unchanged at 0-0.1%. Meanwhile, a board member proposed to change the 2% inflation target to a medium to long-term goal, which was different from current pledge to reach 2% target in two years. The proposal was voted down by 8-1. In the accompanying statement, the central also said it would " examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," and, "such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome deflation that has lasted for nearly 15 years." The Yen remained steady after the news.
In the European session, the U.K. will be on major focus with BoE minutes featured. The BoE held interest rates unchanged at 0.5%, and kept the asset purchase target at GBP 375b during the last MPC meeting. It's expected that the decision on interest rate was unanimous. Focus should be on the vote to expand the asset purchase program. Outgoing governor Mervyn King, members David Miles and Paul Fisher are expected to have voted for a GBP 25b expansion. The sterling suffered another round of sell off yesterday after weak inflation data. It will probably stay pressured if the minutes showed these three members voted for QE expansion again.
On the data front, Japan trade deficit narrowed to JPY -0.76T in April. Australian Westpac consumer sentiment dropped -7% in May. Data due today: the current Eurozone account, U.K. retail sales, public sector net borrowing, Canada retail sales and U.S. existing home sales.
The BoJ left its policy unchanged today. With unanimous vote, BoJ maintained the pledge to increase monetary base at annual pace of JPY 60T to JPY 70T. Interest rate was kept unchanged at 0-0.1%. Meanwhile, a board member proposed to change the 2% inflation target to a medium to long-term goal, which was different from current pledge to reach 2% target in two years. The proposal was voted down by 8-1. In the accompanying statement, the central also said it would " examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," and, "such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome deflation that has lasted for nearly 15 years." The Yen remained steady after the news.
In the European session, the U.K. will be on major focus with BoE minutes featured. The BoE held interest rates unchanged at 0.5%, and kept the asset purchase target at GBP 375b during the last MPC meeting. It's expected that the decision on interest rate was unanimous. Focus should be on the vote to expand the asset purchase program. Outgoing governor Mervyn King, members David Miles and Paul Fisher are expected to have voted for a GBP 25b expansion. The sterling suffered another round of sell off yesterday after weak inflation data. It will probably stay pressured if the minutes showed these three members voted for QE expansion again.
On the data front, Japan trade deficit narrowed to JPY -0.76T in April. Australian Westpac consumer sentiment dropped -7% in May. Data due today: the current Eurozone account, U.K. retail sales, public sector net borrowing, Canada retail sales and U.S. existing home sales.