Risk off table before Fed meeting

Markets have spent the majority of the day dissecting inflation rates across Europe as well as those to be announced in the US. 

European Central Bank president Mario Draghi will be sitting a little less uncomfortably than before as rates head higher, while back in the UK the inflation rate continues to creep lower, getting perilously close to the 2% target.

Coinciding with the swearing-in of German leader Angela Merkel, ZEW economic sentiment figures have shot higher.

Dixons see impressive first-half profits

The UK’s largest electrical goods retailer Dixons has beaten market expectations with some impressive first-half profits that more than double last year's, going some way to legitimise the 400% increase the share price has had since January 2012. 

GlaxoSmithKline has clearly had its 'Jerry Maguire' moment, announcing the cessation of incentives for doctors to promote their goods and dropping targets for marketing staff. Laudable as these actions are, its hard not to believe that sales and profits will be badly affected. With the bribery investigation going on in China, it looks like the company has decided to jump before being pushed as it is forced to do something to tackle its conflict of interest. 

Ahead of the important festive sales period the big four food retailers have had their egos and statuses dented, after a report highlighted a drift in market share away from the core companies to shops such as Lidl and Aldi.

US majority predicts no change to QE

It is very hard to discuss the US without covering 2013's final Federal Open Market Committee meeting on Wednesday and the possibility of tapering. In the run up, 34% of institutional analysts are predicting a cut to the monthly debt purchasing scheme; though this of course still means that 66% think there will be none. Clearly the majority held sway yesterday as markets rallied, but, 24 hours before the meeting itself, nerves have crept back in as equity indices have fallen. 

Copper creeps higher

Copper continues to creep higher as it continues its impressive December run. 

Gold on the other hand is trading sideways as it waits for economic indicators to give it a sense of direction. 

Brent crude has given back almost all of yesterday’s gains as thinning markets increase the volatility. 

EUR/USD wobbles

EUR/USD has wobbled as it approaches year highs – just above the 1.3800 level – so close to the FOMC’s decision over quantitative easing. 

Once again USD/JPY, having looked set to stretch its legs and charge higher, has lost faith. The last six week’s worth of momentum has dissipated very quickly. 

AUD/USD has continued drifting lower and has now reached levels last seen at the end of September. This is a key area of support – the next is considerably lower.

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