Markets remained nervous ahead of the Fed rate decision. The Fed are expected to leave rates unchanged, despite pressure from Trump, for all Central Banks to cut rates. The Bank of Canada cut rates, in an effort to stimulate the flagging economy, under pressure from the Trump administration with threats of big tariffs. The threat of tariffs remains unsettling, for world markets, although their effectiveness is tried and proven. Central Banks remain in focus and the ECB will also make their own decision on rates, who are expected to cut. Markets will also watch the GDP growth numbers from key European nations, including Germany, Italy and Spain. These are likely to confirm recessionary conditions remain, while calls for rate cuts, are fully justified. The EUR drifted back to 1.0400, while the GBP held above 1.2400.Australian inflation data is headed in the right direction, falling to 2.4%, encouraging the RBA to finally begin the rate cut cycle. This was expected, but did undermine the currency, with the AUD falling back towards 0.6200. The NZD was softer, drifting to 0.5650, ahead of important economic data today. NZ Trade data will be released, while Business Confidence data may well confirm some weak recovery in sentiment. Asian markets remain quiet due to lunar New Year celebrations.
