FTSE manages rally ahead of FOMC

Heading into the close the FTSE 100 is up 25 points, holding onto positive moves made this morning even with the strong possibility of disruption ahead of tomorrow’s Federal Open Market Committee statement.

With so many companies retesting the price-earning multiples last seen before the markets collapsed, traders can be forgiven for thinking twice about buying the dips.

FTSE attempts recovery

The FTSE – along with the majority of European markets – staged a half-hearted rally during the morning session, having seen the best part of 300 points taken off the index in the previous three trading days.  

The noises coming out of the UK banks imply that a fresh round of belt-tightening is in the pipeline, with Lloyds and Allied Irish Banks announcing job cuts and Royal Bank of Scotland having to set aside a further £3 billion for previous misdemeanours. 

Following the awful price action of Apple in America, ARM Holdings have suffered today as one of its largest customers begins to struggle. 

The rug under Carpetright is looking a little threadbare, as the company has been forced to issue its second profit-warning in the last four months. This is because improving UK sales were not enough to offset dwindling European returns.

Apple weighs down NASDAQ

The NASDAQ has failed to join in the rallies of both the Dow Jones and the S&P 500, as that one bad Apple (and its particularly large market-weighting) looks to have spoilt the batch. Following the tech giant's announcement last night, after-hours trading saw shares sell off by as much as 9%. Today’s plethora of US companies reporting figures include Ford, Pfizer, AT&T Corp and Yahoo

The FOMC will kick off its two-day meeting today, culminating in tomorrow evening's statement on its amendments to the current debt-purchasing scheme. Markets are factoring in further tapering, which partially explains the market jitters we have seen in the last few trading days.

Precious metals drift

Both platinum and palladium have continued to drift lower, continuing the last week’s worth of poor momentum. 

With less than 24 hours until the latest FOMC statement gold traders look to be treading water, guessing how well the markets will be able to handle another round of tapering. Although the precious metal has sold off in the last two trading sessions, it still remains in an upward trend. 

Interest rate increase saves rupee

For some time it has been emerging market currencies that have offered the most volatility, and India’s central bank's interest rate increase has – for the time being – seen the rupee avoid the battering it had been suffering from. Possibly on the back of this, the markets are expecting the Turkish central bank to employ a similar strategy. 

On the back of the latest UK quarterly GDP figures, GBP/USD has remained remarkably uninterested – of course the next 24 hours of economic releases could well offer plenty of reasons for that to change.

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