Central Banks A Disappointment To Markets

The markets expressed disappointment as Central Banks such as the BoJ and the Federal Reserve decided not to input further stimulus into their economies. In Japan, stocks are brought down overnight, further amplified by weak data from Japan. The core machinery orders data fell to 8.8 per cent in April, underwhelming expectations of a 8.2 per cent fall. Core orders year to year were also down, by 1.1 percent. The Bank of Japan also released corporate good price index figures which gained by 0.6 per cent in May after not moving in April.

While the good price gain was expected, the machine orders is a sure indicator of the amount of capital investment, and further compounds the issue of no further stimulus to boost the Japanese economy. While the dollar found favor in the Asian session, the Yen saw its biggest fall in 3 years.

Stocks
While China remains closed for the third day of national holidays, the Hong Kong’s Hang Seng fell 1.2 per cent. The Nikkei 225 also fell rapidly to -1per cent before reversing its fortunes towards the end of the Asian session, where it was just 0.22 per cent lower. In South Korea the Kospi Index declined 0.18 percent following the release of the unemployment numbers which were at 3.2 per cent in May from 3.1 percent the previous month. In Australia, the S&P index was down 0.65 per cent as the AUD dropped to a near 3 year low against the dollar.

Stocks in Europe were up in the overnight session as the markets keep their focus on the eurozone industrial production data due for release later today. The markets still fear the end of the U.S. monetary stimulus intervention. In the European session, the EURO STOXX 50 were up 0.50 percent. The French CAC was up 0.52 percent, and the German DAX was up 0.28 percent.

Forex
The USD was up against its pairings, as investors concerned about the Central Bank's near-term positions took advantage of the safe haven dollar. The USD was up 0.13 percent against the EUR. The GBP/USD was down 0.07 percent, although the big mover in the session was the USD/JPY which was up 0.84 percent, as the Yen plummeted on BoJ and data insecurities.

Commodities
The stronger USD inversely affected the commodities. Gold was 0.24 percent lower, Silver 0.10 percent lower and Crude oil fell 0.92 percent.

What to watch for today:
Today attention, will be focused on the data releases from the eurozone including CPI and Industrial Production. All eyes will then turn to the Fed Budget Balance for the U.S. Binary options traders have the possibility to make profits from the movement of the assets, affected by positive or negative data releases.