Markets Overview

HIGHLIGHTS AHEAD

    The Day has finally arrived. The US Fed Reserve will conclude itstwo-day 16/17 June 2015 FOMC meeting and announce its decision(due at 18 June 2015, 2:00am Singapore time). We will also closelyfollow Fed Chair Janet Yellen’s post-FOMC press conference and a reviewof the latest FOMC economic projections. Our long-held view isthat the Fed rate normalization will take place in the June 2015 FOMCbut markets are pricing in a later lift-off date although still expectedto be sometime this year. (If the Fed does hike in June, it is really becausethey want to be off the zero interest rate bound, in our view).

    Aside from the FOMC decision, there will not be much of US importantdata today. Elsewhere in the rest of the developed economies, we willget Japan May machine tool orders, Italian April trade balance, UK Mayjobless claims & April ILO unemployment data, Eurozone April constructionoutput, and the final print for euro-zone May CPI. We havethe Bank of England (BOE) MPC minutes scheduled for release duringLondon trading hours on 17 June.

    During the early Asia trading hours of today (17 June), Japan’s May exportexpanded by a slower 2.4%y/y pace (from 8% in April, below forecastof 3%), while import declined at a faster pace -8.7% (from -4.2% inApril, below forecast of -7.5%). Despite the faster decline in imports, Japanstill recorded a trade deficit of JPY216bn up from April