Market down ahead of central bank releases

Market down ahead of central bank releases

By William Leys (Premium Client Manager, CMC Markets)
17 June 2013

The Australian market is trading slightly lower at midday, following Wall Street’s fade on Friday night.

It seems investors are exercising caution ahead of Wednesday’s Federal Reserve policy board meeting. The market has been trying to determine exactly when the central bank’s bond purchasing program will begin to wind down, and this meeting will provide the next major insight. Given the mixed economic data of late, the expectation is that Bernanke will continue as is for the time being, but this is certainly not a given.

Local investors will also be conscious of tomorrow’s RBA monetary policy statement release, as this will shed some light on the interest rate outlook. Recent soft data suggests a cut is on the horizon, but like the situation in the US it is more a matter of anticipating the timing.

Given the AUD’s sensitivity to central bank action, or even posturing, we can expect its recent volatility to continue as traders take positions ahead of these key events.

www.cmcmarkets.com

ENDS

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