– The Fed has put the cat amongst the pigeons this morning wity the FOMC minutes revealing that the recent emergence of the idea that they will pause the taper are off the money. Rather, it seems they are not inclined to pause any time soon. You can read our US colleague’s FOMC piece here.
– The impact of this news was that the US dollar caught a lift and stocks turned down once again after the earlier recovery from the lows of the day. With 30 minutes to go before the close, the Dow is off 0.32%, the Nasdaq is down 0.77% and the S&P 500 is off 9 points to 1832 for a loss of 0.48%.
– The Fed’s words seem to have had the most impact, because the data in the US is continuing to print poorly. Weather-related certainly, but the fall in housing starts and the drop of 4.1% in mortgage applications suggests it might be more than just weather. Equally the PI increase of 0.2% in January – while still very low – was better than expected, which the Fed will like as it tries to keep inflation above 2%.
– In Europe, stocks went nowhere with the FTSE and DAX flat, while in Paris the CAC rose 0.24%. In Milan, stocks fell 0.2% and in Spain, the IBEX 35 rose 0.11%.
– Locally in overnight trade on the ASX Futures, the March SPI 200 contract fell 4 points to 5271 bid.
– On global FX markets there was a bit of volatility within a fairly tight range. The pound was weaker initially after the unemployment rate ticked up to 7.2% against expectations of 7.1% but it was back in the black pre-FOMC minutes release. It’s back under 1.67 again now at 1.6688, fairly unchanged for the day. It was similar price action story elsewhere, with the euro making a high of 1.3773 before pulling back to sit at 1.3737 down 0.14% on the day. The Aussie is down a little also at 0.9005, off 0.22%, while USDJPY is largely unchanged at 102.37.
– On commodity markets, Gold’s sell off from the technical resistance continued, losing $11.40 oz or 0.86% to $1313. Crude, somehow, is up again even though the IMF has released a quite circumspect outlook for growth. With Nymex up another 1.20% to $103.66, this is a big tax on global growth. Copper lost 1 cent while the Ags’ rally continued with Corn up 1.17%, Wheat 1.35% higher but Soybeans lost 0.51%.
On the data front today, we have some big trigger points with the “flash” HSBC and Markit PMI’s for this month being released. China is the key in our time zone and then we cycle around the world this afternoon and tonight.
In Europe, PPI is out along with US CPI which is going to be huge. Jobless claims are also out in the US tonight.