Global markets take a breath ahead of statements in the US shortly, in which analysts expect the introduction of additional stimulus.
Global equity markets rallied and currencies steadied their position against the USD today ahead of statements from the FOMC later this evening. Analysts are confident in further stimulus being added, with recent stimulus having a positive impact on the economy over the year. Poised in a difficult place, the USD continues to look vulnerable to losing ground as the fiscal cliff blocks the longer-term outlook. There is always room for disappointment with such a build-up and the USD sell-off could open the door for an aggressive retracement.
Unemployment figures in the UK came in surprisingly better than expected, so much so that data released today showed that unemployment in the UK fell by 82,000. It’s a positive figure for the UK, but shouldn’t distract from the greater issues at hand. Incoming governor, Mark Carney, today indicated that his focus would be on the growth of the economy, at the cost of inflation if manageable. The BoE has always focused on the 2% inflation target; something which the incomer appears to be less concerned about.
The USD is looking a little slippery as the FED tries to make Christmas that little bit merrier. (JKM)