Equities Rebounded On FOMC, Dollar Higher

US equities were lifted overnight as Fed sounded optimistic on the economy yet maintained the pledge to be patient on raising interest rates. DJIA rebounded and gained 288 pts, or 1.69%, to close at 17356.87. S&P 500 rose 40.15 pts, or 2.04% to close at 2012.89. Asian markets followed with Nikkei trading up over 400 pts, or 2.3% at the time of writing and regained 17000 handle. Easing risk aversion provided retreat in the Japanese yen and most yen crosses are generally higher. Dollar rebounded against European majors. In particular, EUR/USD was held below near term resistance of 1.2599 and maintained near term bearishness. Meanwhile, GBP/USD also stayed bearish with 1.5825 resistance intact and is back pressing 1.5540 low. The greenback might pick up some upside momentum again for the rest of the week.

Fed maintained benchmark interest rates near to zero as widely expected. Also, FOMC maintained the pledge to keep rates low for a "considerable time". In the updated projections, 15 of 17 FOMC members continued to expect first rate hike in 2015 while the other two expected in 2016. They now saw interest rates to be at 1.125% by the end of 2015 and 2.500% by the end of 2016, slightly lower than prior projections. Inflation forecast was lowered with PCE projected to be to 1.0-1.6% in 2015 versus prior 1.6-1.9%. For 2016, PCE is see to be at 1.7-2.0% and for 2017 at 1.8-2.0%. GDP projections were left unrevised at 2.6-3.0% in 2015 and 2.5-3.0% in 2016. Unemployment rate is projected to be 5.2-5.3% in 2015 and 5-5.2% in 2016. Fed chair Janet Yellen later said in the press conference that Fed is unlikely to start the rate hike for "at least the next couple of meetings".

Released in Asian session, New Zealand GBP rose 1.0% qoq in Q3 versus expectation of 0.7% qoq. Looking ahead, German Ifo business climate is the main focus in European session and is expected to show some improvements in December. UK will release retail sales. From US, jobless claims, Philly Fed survey and leading indicators will be released.