Last night’s incredibly dovish meeting minutes from the FOMC served to give a leg-up to equity markets globally as US interest rates appear to be going nowhere fast. The Hang Seng added more than 1%, not least by virtue that the corresponding collapse of the greenback meant a weaker Hong Kong Dollar too, but on the flipside the Nikkei was the regional laggard, selling off in reaction to the Yen rallying to its highest level in three weeks. These two moves may have been largely driven by changes in currency values, but it’s worth bearing in mind that given the number of high profile threats to geopolitical stability right now, any gains could quickly find themselves being eroded if sentiment shifts.
Wall Street is expected to extend yesterday’s rally at the open – we’ve got weekly jobless claims due shortly before the opening bell, but with this abundantly cautious tone emanating from the Fed, it would take a significant jump here to rock confidence. Some are now saying we won’t see a rate hike until 2016, so ahead of the open we’re calling the DOW up 29 at 17023 and the S&P up 5 at 1974.