Fed decides whether to ‘Dectaper’

Tonight’s Fed announcement looms large across the markets. The
US central bank still retains its ability to surprise and there is
still a good degree of uncertainty as to whether the pace of asset
purchases will be slowed this month or if the Fed wait until early
2014.  Tapering, as we saw last summer, will have significant
impact in global capital flows and, in particular, for the US
dollar as funds flow from emerging markets back into the
greenback.

In Europe, German IFO figures are due this morning. The key
business sentiment survey was expected to come in higher than
forecasted but dipped slightly
dragging the euro lower in early trading this morning.

Sterling data is plentiful today but we don’t expect too much
movement in light of this evening’s main event. We have the average
weekly earnings, employment change, unemployment rate and jobless
claims figures released along with the Bank of England minutes.

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