US markets opening bell

As the US markets open, investors will continue to be cautious over the potential reduction of easing from the Federal Reserve. Markets dropped sharply yesterday, with real yields on US government bonds turning positive for the first time in 18 months and the FTSE 100 briefly falling below 6,300 for the first time since April.

The dollar fell by nearly three per cent against the yen, but has since recovered slightly by 0.7 per cent to 96.7 yen.

A good marker of confidence should be the auctioning off of $21bn of 10-year US government bonds, going ahead at 1pm New York time.

Commenting on the decision to reduce quantitative easing and the market's reaction, City AM’s Allister Heath said this morning,

The good news is that we may finally be nearing the moment of truth when markets start to return to their senses; the bad news is that the transition will be hugely painful.