Morning Meeting: Prudence Hits Asia

Good Morning.

As expected the FOMC meeting was a non event. There were no changes to the parts describing monetary policy or to the forward looking parts of the October FOMC statement. The Fed reiterated that it will continue its asset purchases and potentially scale these up until the labour market improves substantially. In addition, the calendar year guidance was maintained, stating that the FOMC expects the Fed Funds rate to stay exceptionally low until mid-2015.

US stocks fell on Wednesday after the FOMC meeting, even as the Fed acknowledged some brightening parts of the economy. The DJIA closed the session 0.19% lower to 13,077.30, the S&P500 fell 0.31% to 1,408.75 while the tech Nasdaq fell 0.9% to 2,981.70.

An uneventful FOMC meeting together with a thin macroeconomic calendar in Asia were the reasons behind a choppy start in Asian markets this morning,  although earnings-related losses for companies weighted on investors sentiment.

Hong Kong's Hang Seng Index traded along the flat line at 21,760.24 or 0.02% lower while the Shanghai Composite Index fell 0.17% to 2,112.36. Japan's Nikkei Stock Average traded up 0.36% to 8,986.23 but South Korea's Kospi fell 0.07% to 1,912.27.

Among notable gainers in Asia Thursday, telecom KDDI Corp.   jumped 5.5% in Tokyo, while trading house Sumitomo Corp.   rose 0.6%, after a Nikkei news report that the firms plan to combine their cable-television holdings into a single unit. On the negative side, Japan's Sharp Corp., dropped 5.4% after a report in the Nikkei that the firm is bracing for a ¥400 billion (about $5 billion) half-year net loss, almost double what the company projected in August.

With stocks consolidating, the yen was pressured as the currency typically strengthens on risk aversion and investors speculated that the Bank of Japan will expand monetary stimulus next week: the dollar was up 0.2 percent at 79.95 against the yen to hover near its highest since early July of 80.02 touched on Tuesday. The euro was up 0.3 percent at 103.84 against the yen. The Australian dollar also rose 0.4 percent to 82.89 against the yen. The euro was up 0.1 percent at $1.2984, off a near two-week low of $1.29205 on Wednesday.

A falling dollar gave some breath to dollar denominated commodities such as Oil and Gold. The precious metal traded 0.38% higher to 1,708.10$ an ounce during the Asian session, while the WTI rose 0.28% to 85.97$ a barrel.

We got an early start today in Europe as Credit Suisse Group AG, the second-biggest Swiss bank, said that profit fell 63 percent in the third quarter, burdened by an accounting charge related to the bank's own debt. the Net income fell to 254 million Swiss francs from 683 million francs in the year-earlier period. This missed the 415 million-franc mean estimate of nine analysts surveyed by Bloomberg. The pretax charge of 1.05 billion francs relates to an accounting rule tied to the theoretical cost of buying back the bank's debt as market prices fluctuate.

CS will weight on the banking sector in Europe today, although investors attention will be for the other side of the Atlantic where the Macroeconomic agenda is quite thick today with Durable Goods orders expected to show an increase on MoM basis of 7.1% and Initial Jobless Claims to follow to 370k units, later in the day Pending Home Sales will give another hint on the real estete status in US which has been the main driver of the US market up to now.

It's time to work on our game plan.

Have a great day.

Originally posted at www.77sigmatrading.com