The Fed decided to maintain key interest rate – in line with expectations but the IOER rate has been increased by 5 bps to 1.6%. The Fed will continue the repo operations at least through April and this IOER move could be the first tiny move towards the exit strategy. Market response is very limited so far: US500 is close to daily highs and EURUSD fights with 1.10.
Traders should remember that major market reactions could take place during the post-FOMC conference that begins at 7:30pm GMT. Investors will be watching for any remarks regarding repo operations and the virus impact. Also, we still wait for quarterly reports from Facebook and Tesla today in the evening.
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