Equities cautious ahead of central bank meetings

Market Trends - 25/04/2016

Equity markets were trading mixed but broadly lower in Asia and Europe, ahead of the Federal Reserve and the Bank of Japan policy meetings this week. The Federal Reserve is widely expected to keep the Fed funds rate unchanged at its meeting this but it is the Bank of Japan that is keeping investors guessing. Speculation is rife that the BoJ could announce some form of easing, which is expected to include both a rate cut, currently estimated at -0.10% and an expansion of the stimulus program by an additional 20 trillion yen.

The rumors were sparked after Bloomberg reported the news last Friday citing 'unnamed' BoJ officials. Data from the CFTC showed that speculators were net long on the yen at its highest levels, which is indicative of the short squeeze that followed on Friday. In the US, the earnings season picks up steam with key companies including Apple Inc, Facebook and Amazon set to report their quarterly earnings, with no broad economic data to provide momentum.

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