Chris Turner, Global Head of Markets at ING, notes that the two key market takeaways from yesterday’s FOMC meeting are (a) that the Fed stands ready to support market functioning by keeping asset purchases at least at the current pace and (b) that it is not envisioning any hike through 2022.

"Putting aside some unmatched expectations on yield curve control, the continued dovishness of the Federal Reserve should bode well for a continuation in the risk rally."

"At the same time, the FOMC added another element to the USD bearish argument. And now, with the yen also jumping after the FOMC announcement, it is starting to look like a cleaner weak-USD story, not only to the benefit of procyclical. The Fed has however been overshadowed in the Asian morning by increasing concerns on second Covid-19 waves, especially in the US, with cases in America that re-opened earlier starting to surge again. This has obliterated the FOMC impact on markets, which started the day on a firmly defensive stance with the dollar, gold and treasuries all turning positive."

"Today, the US jobless claims will be watched, as investors search for some confirmation to their recent optimism on the US jobs market. However, it has been reported that the weekly jobless claims report may overestimate the actual unemployment numbers as a portion of the claimants are allowed benefits but do not count in the unemployment numbers, which may help explain the misalignment with the NFP in May. The market reaction function today may start to tell us whether the release is losing some centrality."