Market Update 17/09/13

One line- The rally following Summers departure from the Fed race reverses as investors look ahead to the FOMC meetings today and tomorrow.

- Following the rally yesterday, on the news Summers would not be a candidate for the Federal Reserve Chairman, global stocks have retreated. Market focus has shifted back to whether the Fed will decide to taper in meetings today and tomorrow. Treasuries also rallied and have subsequently fell back with the ten year yield falling to 2.78% and then rising back up to 2.85%. http://www.ft.com/cms/s/0/c2e4a890-1f43-11e3-b80b-00144feab7de.html?siteedition=uk#axzz2f2pLDFdy

- Oil continued to decline on the Syria resolution while emerging currencies resumed their trend, weakening against the dollar ahead of the FOMC meetings today and tomorrow. The expectation is that the Fed will reduce its monthly Treasury purchases by $10 billion to $35 billion and that it will keep mortgage bond-buying at $40 billion. http://www.bloomberg.com/news/2013-09-16/australian-futures-fall-after-stock-jump-as-dollar-steady.html

- UK inflation slowed to 2.7% in August compared with 2.8% in July, the figure was the same as the median forecast. Having strengthened yesterday vs the dollar the pound pared its gains this morning. http://www.bloomberg.com/news/2013-09-17/u-k-inflation-slows-to-2-7-on-transport-clothing-prices.html

- Yellen is now the odds on favourite to be the next Federal Reserve Chairman. Currently the vice chairman at the Fed, she would be the first woman to serve in the chairman role. Obama has promised to reveal his choice in the fall which officially begins on September 22nd. http://www.bloomberg.com/news/2013-09-17/yellen-said-to-top-obama-s-fed-list-after-summers-s-exit.html

- Minutes from the Reserve Bank of Australia showed policy makers were leaving open the option to cut rates further from the record low of 2.5%. The country has been struggling with rising unemployment and slowing growth as demand for its exports has receded. The aussie dollar has lost 10% this year and unemployment is at a 5 year high of 5.8%. http://www.bloomberg.com/news/2013-09-17/rba-says-rate-cuts-still-possible-signals-no-moves-imminent.html

Data

S&P 1697.60 0.57%
FTSE 6604.90  0.27%
Nikkei 14,311.67 0.65%

EUR/USD- 1.3359 0.19%
USD/JPY- 99.21 0.13%
GBP/USD- 1.5898 0.01%

Gold- 1319.46 0.51% 
Oil (Brent)- 109.74 0.30%

Copper- 322.25 0.59%

10 year yields
US- 2.84 (-3bps)
UK- 2.90 (+2bps)
Japan- 0.72 (0bps)