From the opening bell to close, our commentary keeps you updated with the latest market action.
Morning Comment: European Markets Soft; Eyes On Fed Minutes; Bernanke Speech
Soft open for European share markets this Wednesday morning ahead of key economic data and the eagerly awaited Fed minutes together with Fed head Bernanke’s comments. The risk tone improved overnight after Wall Street recorded fresh highs again and Asian markets enjoyed a relatively upbeat session after the BOJ retained policy measures. BOJ outcome was not a surprise with the bank set on keeping monetary policy loose and the inflation target of 2%. The BOJ encouragingly said that exports have stopped weakening and consumer sentiment is on the mend.
On Wall Street Tuesday, dovish comments from two Fed officials suggested that the central bank is not close to tapering its bond-buying programme. Speaking at separate events in Europe, New York Fed President William Dudley, who is also vice chairman of the FOMC said the central bank may adjust the pace of asset purchases up or down depending on the economic outlook and that he was unsure which way the next change will be. St. Louis Fed head James Bullard on the other hand said the Fed should continue with the present stimulus programme, saying it is the best tool the Fed currently has to spur economic growth.
Comments by both Fed speakers clearly indicate that the Fed are not ready to let go of the US economy’s hand just yet. It is likely that Bernanke’s comments later today will be similar to his fellow Fed peers, staying neutral on the matter of increasing or decreasing quantitative easing. Looking ahead to the day’s economic releases, we have BOE meeting minutes, UK CBI retail sales and public finances data. In the US, we have existing home sales which should garner some attention before the FOMC minutes and Bernanke’s hotly awaited testimony.