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This week started with most equity traders cautiously optimistic about what the Federal Open Market Committee minutes would reveal about the US Federal Reserve’s thinking as far as the tapering of quantitative easing was concerned. Fed chairman Ben Bernanke’s speech did feel very much like he was back-tracking over what he had previously said, and any fears over imminent action have faded.
So where now for the markets? Once again eyes will look towards the US reporting season for equity newsflow. This afternoon sees the first reports of the major banks: JP Morgan and Wells Fargo. Next week the pace of reports will step up dramatically, and we are likely to see the beginning of a pattern signifying how US companies are performing, which will undoubtedly then be reflected in the equity markets.
The mild upturn in the FTSE has been helped by the banking sector that has edged higher, although the miners are doing their best to pull the markets lower. The volatility that the currency markets – specifically dollar, pound and euro – had thrown into the markets has also dissipated.