18/09/2013

Equity markets in Asia were not correlated today, the Nikkei rose 1.35%, the  Hang Seng  unghanged at -0.01% and the ASX200 down 13 points to 5238. In USA the S&P500 closed yesterday to 1704 .The  Nasdaq  index had a performance of +0.75% and the Dow rose +0.23%.  Europe this morning is quite flat, at 7:23 GMT the DAX is up +0.08%, Eurostox +0.03%.  The FX market also is not volatile, probably waiting the FOMC Rate decision and the announcement regarding the taper in USA.  EurUsd is trading at 1.3354, the UsdJpy at 99.14 and  GbpUsd at 1.5917. Equities are trading near all times high or they already reached an absolute top, risk appetite however might decrease if a strong market catalyst might make investors to take profit from their long positions. In Europe the most important data today will come from the BOE with the Minutes, BOE MPC Vote Hike.

In the USA a string of data will come from the housing sector with 1.30 Housing Starts, then 12.30 Building Permits and 14.30 EIA Crude Oil Stock Change.  The financial community is waiting at 18:00 GMT the FOMC Economic Projections and the Fed Pace of Treasury Purchase Program & MBS Purchase Program. the FED might need to tapering soon to allow for markets to adjust without compromising  stability and give enough runway before potential rate hikes down the road. The FED holds both the pump and the needle for the exuberance in the markets and a reduction of liquidity linked  with worse than expected forecast underlined during Bernanke press conference can be a reversal for a market correction.