Daily FX Update, 30 April 2015 OVERNIGHT MARKET UPDATE:

·         Fed officials acknowledged slower GDP growth in Q1, but it put it down, at least partly, to “transitory factors”. In the bigger picture, the outlook was little changed. Odds on a June move continue to soften, but the Fed still clearly sees itself on a normalisation path.

·         In US, the Q1 GDP undershot market expectations rising just 0.2% q/q annualised. The composition of the breakdown was also unfavourable.  

·         US pending home sales rose 1.1% m/m in March and February sales was revised higher to 3.6% m/m. These data continue to trend upwards and point to a firmer outlook for housing market activity.  

·         In Euro, the March money supply data were encouraging with M3 rising 4.6% y/y. Mortgage lending also rose 0.2% y/y against a flat result in February.

·         The preliminary estimate for German CPI rose 0.3% y/y in April (0.1% y/y in March).    

·         In the currency market, broad-based position unwinds continued to dominate the market, with the USD selling broadening to the EUR and the GBP after the soft US GDP print. The AUD consolidated on the prior break and the NZD underperformed as the RBNZ shifted its tone. 

·         US Treasury yields trended up with only a volatile flurry around the GDP data, before changing direction prior to the FOMC. The 10-year yields up 4 bps for the session. 

·         US stocks fared better, staging a recovery after the FOMC, with the Dow Jones and S&P 500 currently both down 0.4%.           

·         Crude oil markets rose, with prices continuing to edge above the highs set in recent weeks. Brent and WTI prices closed at the highest level in nearly five months as US crude oil inventories rose by just 1.9 million barrels (compared to more than 5.5 million barrels the previous week).                

Gold prices snapped a two-day gain to end lower after the FOMC. Gold prices declined 0.25% to US$1,209.85 per ounce from the previous closing.