-- AM Analysis
Weakness In European Futures
Investors banking on a “Santa Rally” would have been encouraged by the strong start to the week European indices have enjoyed. Unfortunately, we are seeing weakness in European futures this morning as we prepare for Tuesday’s open as investors continue to gauge the outlook for U.S stimulus before the Federal Reserve meets today.
The Federal Reserve will begin a 2-day meeting today to discuss, amongst other things, the central banks stance on tapering unprecedented bond purchases. Over the last week we have seen more and more economists develop the belief that Fed policymakers will indeed taper this Wednesday, but this in a way is proof that the economy is strong.
More than two stocks gained for each that fell on the MSCI Asia Pacific Index, which dropped for a second week last week as improving U.S. economic data spurred bets stimulus will be reduced. Meanwhile, gold advanced for a third day and silver gained as investors await the U.S. Federal Reserve’s decision on the timeline for reducing stimulus.
By Max Cohen
-- PM Analysis
European Stocks Trade With Small Declines
European stocks trade with small declines as investors remain reluctant to take positions ahead of the all-important FOMC meeting tomorrow. Some market participants believe the Fed may begin to wind down its $85 billion a month asset purchases tomorrow after a string of data has shown the US is recovering nicely. The FTSE remains lower after a worse than expected consumer price reading. Inflation in the UK slowed to the lowest level since November 2009 last month.
The cost of living in the US was unchanged in November from a month earlier helped by cheaper energy prices. However, the core figure showed a slight increase to 0.2 percent which excludes food and fuel.
Gold fell for the first time in three sessions as the Federal Reserve met today for day one of their two day meeting and the possibility they could reduce stimulus tomorrow.
By Lee Mumford
Original Post
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