So there were no major surprises from the Fed last night and this has left Asian markets struggling to find any overall direction during the session. The Nikkei found support off the back of a weaker Yen – USD/JPY traded as high as 108.80 – and some fractionally better than expected economic data, whilst ample liquidity in money markets helped reverse earlier declines in Shanghai. Hong Kong however failed to find anything worth cheering and with the subtext of the FOMC meeting pointing towards the fact that rates may end up climbing more aggressively than had previously been expected, the Hang Seng found itself under pressure.
Wall Street is eyeing some modest gains at the open although we do have some construction data due for release before the bell which in turn could provide fresh direction. The Scottish referendum is also worth mentioning although any fall-out in the event of the ‘yes’ campaign winning – which seems increasingly unlikely – would arguably be centered around UK markets. Some commentators have suggested that this could initiate a bigger correction globally, but on balance a flight to quality – something that would arguably cheer Wall Street further - would seem the more likely outcome. Ahead of the open we’re calling the DOW up 13 at 17170 and the S&P up 3 at 2005