Market Update 18/09/13

One line- Dollar and gold weakness while stocks gain cautiously ahead of the result of the FOMC meeting today.

- US equities gained yesterday as Microsoft's plan to buy back $40 billion in stock fuelled optimism that companies would return more cash to shareholders. The euro strengthened as German investor confidence increased. http://www.bloomberg.com/news/2013-09-16/australian-futures-fall-after-stock-jump-as-dollar-steady.html

- Gold continued its decline along with emerging market stocks ahead of the conclusion of the FOMC meeting today. Positive news for consumer discretionary companies in Japan pushed the Nikkei up 1.4%. http://www.bloomberg.com/news/2013-09-17/asian-index-futures-rise-before-fed-as-crude-oil-rebounds.html

- European shares advanced this morning but investors are cautious about adding to long positions before a decision on tapering is made today. The Bank of England released minutes from the September 4-5 meeting that showed officials unanimously voted to maintain policy as the UK economy recovers. US housing starts data is expected to show growth from 896 000 to 917 000 annualized from July to August.
http://www.bloomberg.com/news/2013-09-18/european-stock-index-futures-little-changed-before-fed.html

- The dollar lingered near 5 week lows against a basket of currencies yesterday after losing 0.6% in the last week. The decline has been caused by an easing of the Syria situation and Summers exit from the Fed race. http://www.bloomberg.com/news/2013-09-17/dollar-near-3-week-low-versus-euro-before-fed-concludes-meeting.html

- WTI advanced for the first time in four days before a report by the Energy Information Administration. The report is expected to show that crude inventories fell to the lowest level since August 2012.
http://www.bloomberg.com/news/2013-09-18/wti-swings-after-three-day-drop-as-libya-seeks-to-restore-output.html

Data

S&P 1704.76 0.42%
FTSE 6574.74  0.07%
Nikkei 14,505.36 1.35%

EUR/USD- 1.3356 0.02%
USD/JPY- 98.87 0.26%
GBP/USD- 1.5970 0.42%

Gold- 1302.56 0.61% 
Oil (Brent)- 108.38 0.18%

Copper- 323.95 0.51%

10 year yields
US- 2.84 (-1bps)
UK- 2.95 (+2bps)
Japan- 0.72 (+1bps)