US equities staged another day of strong rally overnight and the positive sentiments carried on in Asian session. Dow 30 jumped 421.28 pts, or 2.43% to close at 17578.15, and is having the 17991.18 record high back in sight. That's also the biggest daily gain since December 2011. Meanwhile, S&P 500 48.34 pts, or 2.4%, to close at 2061.23. The consecutive two days of total 4.5% marked the best two days run since November 2011. Analysts attributed the strong risk appetite to the dovish FOMC statement which indicated that Fed is patient on raising interest rates. In other markets, crude oil is taking a breath above 54 level as recent sharp decline paused. Gold continues to struggle around 1200 handle. The dollar index trading around 89.26 for the moment and is heading back for a test on 89.55 high. EUR/CHF is gyrating around 1.2040 after yesterday's surprised move by SNB.
Released in Asian session, BoJ maintained the unprecedented stimulus as widely expected. Policy makers voted 8-1 to hold the annual target of monetary base expansion at JPY 80T and interest rate is kept near zero. Board member Takahide Kiuchi dissented again and called for reduction to previous JPY 60T to JPY 70T. BoJ struck a slightly more optimistic tone regarding the economy and said it " continues to recover moderately as a trend". Assessment on exports and output was also revised up. Also released in Asian session, Japan all industry index dropped -0.1% mom in October. New Zealand NBNZ business confidence dropped to 30.4 in December. UK Gfk consumer sentiment dropped to -4. in December.
Looking ahead, German PPI, Gfk consumer sentiment, Eurozone current account, UK public sector net borrowing and CBI reported sales will be released in European session. But the main focus would be in Canadian data. Canadian CPI is expected to slow to 2.3% yoy in November but core CPI is expected to rise to 2.4% yoy. Retail sales is expected to drop -0.4% mom while ex-auto sales is expected to rise 0.2% mom in October.
Yesterday, SNB surprisingly announced to cut interest rate to -0.25% on sight deposit account balances that exceed a given exemption threshold. Negative interest is expected to be levied from 22 January 2015. The move attempts to limit unwanted CHF appreciation and alleviate pressures on the EUR/CHF floor. The central bank in the accompanying statement reiterated its pledge to the EUR/CHF floor if 1.2 and would 'take further measures, if required'. More in SNB Surprisingly Introduces Negative Rates To Defend EUR/CHF Floor.