By Chris Becker
Thank Dog below that’s all over. The Fed met and did nothing overnight, leaving the interest rate at near zero percent. The language however was what markets reacted to and in a nutshell it wasn’t dovish enough to support stocks, but was enough to send the USD nose diving. This gave all commodities and commodity related assets like the Aussie dollar and gold a big lift. Bonds were bid on the extreme short end but also all across the curve as inflation expectations fell. The fallout will continue today in Asia, as stocks especially are not out of the woods yet. More on that later.
Recapping Asia’s session, where it was another fascinating day for Chinese stocks, as the Shanghai Composite was at first left to its own devices slumping on the open, and then supported in the afternoon, although it fell 2% it again closed just above terminal support at 3000 points. How convenient again. Without this intervention, the Composite would be around 2000 points or less as nothing else is holding it up:
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