What you need to know before the open – 19/12
So the Fed is going to start tapering its $85bn asset purchase programme. From January, it'll buy $75bn of mortgage and Treasury bonds each month – a modest cut, but one that caught markets off-guard last night, with many calling it wrong.
Equity markets saw an immediate sharp sell-off, although that quickly reversed on the Fed's dovish announcements regarding its forward guidance – interest rates will be kept down until "well past the time that the unemployment rate declines below 6.5 per cent."
And the Nikkei reached a six-year high on last night's news, as the decision to start tapering saw the dollar rally against the yen.
NIKKEI closed up 1.74%, ASX closes +2.01%. At lunch Shanghai down 0.79% Hang Seng down 0.04%
— David Buik (@truemagic68) December 19, 2013
Santa may be coming to town – equity rally expected at opening – FTSE +67, DAX +82, CAC +42
— David Buik (@truemagic68) December 19, 2013
Key events:
- UK retail sales for November at 9.30am. Expected at 0.3 per cent from -0.7 per cent.
- Greece unemployment rate for the third quarter at 10.00am.
- US initial jobless claims (13 December) at 1.30pm. Expected at 334,000 from 368,000.
- US CB leading indicator for November at 3.00pm. Expected at 0.6 per cent from 0.2 per cent.
- US existing home sales for November at 3.00pm. Expected at 5.03m from 5.12m.
- US Philadelphia Fed manufacturing survey for November at 3.00pm. Expected at 10.0 from 6.5.