Traders appear to have decided to sit on the sidelines as they wait to hear what the Federal Open Market Committee have to say next week. On Wednesday we will find out if tapering will be introduced to quantitative easing in September or not. Certainly the bond markets have fully factored in that it will happen before the end of the year.
Last night the Japanese press was of the belief that Larry Summers will be appointed as a replacement for US Federal Reserve chairman Ben Bernanke, the implication being that he is not as keen on quantitative easing as the current chairman, and would be likely to speed up the process of closing it down. Gold has seen the most aggressive reaction to this development and looked ominously like it was going to fall below $1300 before the buyers crept back in.
Hot on the heels of Royal Mail announcing that they are doing an IPO, Twitter has announced that they have started the process too. They have applied for a US listing and it is expected that they will be valued between $10.5 and $11.5 billion. Although it will not be easy for UK clients to take part in the placing, IG will be creating a grey market in the product to give clients the opportunity of exposure.