FOMC, Weak Earnings Weigh on US Stocks

Consumer prices in Australia fell for the first time in 7-years in the first quarter of this year. Headline inflation was down 0.20% missing forecasts of a 0.20% increase and reversed sharply off Q4, 2015’s inflation rate of 0.40%. On a year over year basis, consumer prices grew at a slower pace of 1.30%, data from Australian Bureau of statistics showed early Wednesday. The lower than expected CPI print revived talks of further easing from the RBA over the coming months, which sent the AUDUSD sharply lower to an 8-day low following the release. The biggest deflationary factor came from a 2.50% decline in transport prices. The weighted mean CPI, which is a gauge used by the RBA, increased by 1.40% on an annualized basis in the first quarter of 2016, but still remained below the 2.00 - 3.00% inflation target range set by the RBA.

The first or preliminary GDP estimate from the UK is expected to be announced today at 08:30 GMT. Economists forecast that the UK's GDP expanded at a pace of 0.40% in the first three months of this year. This marks a slower pace of growth than the fourth quarter, which saw the UK's economy expanding at a pace of 0.60%. The GDP estimates come amid a broad slowdown across construction, manufacturing and the services sector, which started off on a weak note in the first quarter. Retail sales also remained weak. The heightened uncertainty from the impending UK referendum on its membership to the EU has also sapped the economy from outside investment with a burgeoning trade deficit, all of which is likely to be reflected in the first quarter GDP.