Morning Update – 28/01/16 – by Arjun Lakhanpal

Morning all.. Wall St shifted lower after a brief rally on the release of the FOMC statement closing down 1% at the end of the session.. Asia had a more stable night as they wait for the result of the BoJ meeting with Nikkei closing down 0.7% and China down 22.5% in a choppy session..Last night the Fed were relatively dovish but there was a sense of a grudging desire to change their emphasis rather than a wholehearted one. This was perhaps part of the reason markets reacted on the negative side.. ‎In terms of the details, a lot was made of the omission from the statement of risks to the outlook being ‘balanced’. This was instead replaced with ‘closely monitoring global economic and financial developments and assessing their implications for the labour market and for the balance of risks to the outlook’. Increases in consumer and business spending were downgraded from ‘solid’ to ‘moderate’, however further improvement in the labour market was acknowledged, with job gains seen as ‘strong’ rather than ‘ongoing’. References to the inflation outlook were mixed. So overall it was dovish but as we highlighted not enough for the market to be convinced that the March door was shut completely.. USDJPY fell with stocks but the EUR was rather weak considering the falls. AUD steady and Kiwi, after falling on a dovish RBNZ (who left rates unch) managed to recover. Looking at the day ahead, it’s a busy one for economic data with the UK where the advanced Q4 GDP print is due to be released (+0.5% qoq expected) followed by various confidence indicators for the Euro area. Germany’s preliminary CPI report for January is due out after this. Over in the US this afternoon, we’ve got last week’s initial jobless claims reading before the important preliminary December durable and capital goods orders data. Last month’s pending home sales data follows this and we close with the Kansas City Fed manufacturing activity index reading. Good luck..