The clock is ticking in countdown to the taper, and traders square up their positions ahead of the Fed announcement tomorrow. Investors know they were lucky to avoid a trimming of the bond-buying scheme in September and now they are not taking any chances, especially after yesterday’s rally.
In London the mining sector is under pressure as the short-term cost of borrowing for Chinese banks has jumped to a seven-week high as lenders scramble to meet end-of-year reserve requirements.
Royal & Sun Alliance is bucking the trend but only because of the recent share price collapse due to irregularities at its Irish unit. The insurer may have to asset-strip in order to shore up its balance sheet.
In the US, we are expecting the Dow Jones to open 10 points lower at 15,874, as tapering fears take over.