20140130

Good morning,

The FOMC didn't deviate from the announced strategy to reduce the quantitative easing with $10bn a month, despite relatively sluggish figures from the US economy recently. The most important item in the accompanying statement was a slight upbeat change to the rhetorics regarding growth which, "with appropriate policy accommodation, economic activity will expand at a moderate pace”.

Market reaction was more or less as expected with the US dollar higher and the stocks ticking lower along with global risk taking. US indices all closed about 1% lower and the risk aversion continued in the Asian session with the JPY going higher and stocks lower - Nikkei lost 2.45%.

Today, the market will be digesting the news from yesterday, which so far has been favoring risk aversion. In addition, we have the release of a string of EU January Sentiment indicators, which all are expected to increase. German January preliminary CPI at 13GMT will also be interesting for the overall monetary policy in the EU, but we don't expect that it will give rise to any change of stance from the ECB.

The US will again take center today, as we at 13:30GMT have the release of the preliminary Q4 GDP figures, which are expected to show a growth of 1.3% QoQ vs. 2.0% in Q3. Pending Home Sales for December at 15GMT will also be interesting and in the light of the recent bad US housing figures, these are expected to come out on the weak side as well. Should the scenario stick, then overall, we should see a day with continued risk aversion and gains in the US Dollar and Japanese Yen.