Traders are cautious ahead of the minutes, but there is little in the way of aggressive short-selling. However, some investors are unwinding long positions just in case the Federal Reserve looks to turn off the QE tap. The Fed has made it clear that the $85 billion-a-month bond-buying scheme won’t last forever, but dealers remain divided over when it is likely to be trimmed. Volumes and volatility will probably remain low until the minutes are released.
In London, two of the biggest sectors in the FTSE 100 are offside: mining and banking are both down 1.5%. Declining metal prices and growth concerns about China are weighing on miners, while Greece’s financial strength could bring eurozone debt crisis into centre stage. Lloyds Banking Group has taken the decision to cut the chord with its German insurance arm, even though this involves taking a loss. The disposal is the latest move in the bank's asset-stripping programme.
In the US, we are expecting the Dow to open 40 points lower at 14,962, as nerves set in ahead of the Fed revelations later.