No Reaction To Powell & Co.

T-Notes -0-01 at 137-16 early on. The cash Tsy curve saw some light bull flattening on Wednesday, with 30s going out the best part of 2.0bp firmer on the day. T-Notes were higher on the day come settlement, but shy of their intra-day peak, witnessed in early NY dealing, even with equities trading sharply lower. EU/AstraZeneca COVID-19 vaccine matters dominated headline flow ahead of NY hours, alongside speculation surrounding the potential for further ECB easing, before focus moved to the first FOMC decision of 2021.

• The Fed left its monetary policy settings unchanged, as expected, with the statement removing some references re: the length of time that it expects COVID-19 to impact the economy. The central bank also noted that "the pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic." On tapering, Chair Powell stressed that it is too soon for policy makers to start debating the timing of an eventual reduction in the central bank's bond buying. "The whole focus on exit is premature," Powell said during his post-meeting press conference. "It's just too early to be talking about dates…When we see ourselves getting to that point we'll communicate clearly about it to the public so nobody will be surprised. We'll do that well in advance of actually considering what will be a gradual taper."
• Little in the way of tier 1 risk is scheduled for Asia-Pac hours, with focus set to fall on the broader market tone and Chinese liquidity matters.