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Yesterday's FOMC swansong for Ben Bernanke may have been the scheduled market highlight, but continued turmoil in emerging market currencies seemed destined to steal the limelight. The Fed did as asked by the market: tapered by $10 billion per month and gave US markets a whipsaw final two hours, and then everyone went back to contemplating the contagion that has continued in the EM space. Falls for the Argentine peso, the Turkish lira and the South African rand, despite central bank efforts regarding the latter two, are the most prominent of a host of moves. Bloomberg highlighted that the Japanese yen advanced against 23 of 24 EM currencies as investors sought shelter. This strength has seen a test of the monthly low 102 level for USD/JPY overnight.
Back on the ground, the UK market is certainly benefiting from a Shell (+2.1%) shaped anchor, as the index's biggest constituent reports fourth-quarter earnings in line with the profit warning it issued earlier in the month. BSkyB (+3.5%) beat its six-month earnings forecasts, with the highlight being stronger-than-expected product growth. Diageo has been providing some morning volatility for equity traders. It is down 5% at the time of writing, having disappointed shareholders after joining in with the emerging markets theme, as key metrics there missed forecasts. The stock has traded down at a low of 1691, falling over 11%, which is either a mistake or someone panicking. Either way, the volatility on offer here mimics the feeling across the market - people are a little more jumpy than they were a week ago.
With approximately four hours to go, we are calling US markets around 0.3% higher as markets adjust to life after Bernanke, or Bernanke 2.0, as many are already calling Janet Yellen.