Good morning. Equity markets finished in the black on Wednesday with traders reacting to news that the Federal Reserve would assess a stimulus exit strategy. The meeting minutes also painted a positive picture, with the board undecided over monetary policy and inflation. Economic news released during the session included Crude Inventories and the Mortgage Index. Both fell in line with initial estimates. Thursday will see the release of Initial Claims (market expects 423,000), Existing Home Sales (market expects 5.23 million) and Leading Indicators. US regulators announced that they would look into ratings agency reform, with the government highlighting the inflation of corporate debt valuations. The move would ensure that ratings companies who receive payments would be required to provide an unbiased valuation metric. The market saw this move as key un the reformation process. Across the Atlantic, Greek debt woes dissipated with the equity markets following the Dow Jones to close higher.
On the equity market front, the S&P500 finished the session 0.8% higher. Energy and Oil companies received a significant boost, with the futures touching $100 a barrel. News that the senate rejected a proposed subsidy reduction helped boost the sector. Machinery company Deere and Co. released positive results for the period, with a 65% rise in earnings. This announcement was unable to support the stock late in the session.
On the currency front, the Swiss Franc rallied considerably against the greenback on Wednesday, with traders covering their risk positions leading up to key data released on Thursday. Initial Claims and Housing data will be announced, with the market factoring in fairly lacklustre results. Trading at 0.8809, the Swiss Franc has experienced heightened degrees of volatility, with the currency trading in a 5 cent range over the last month. UK Inflation data continued to overshadow the markets sentiment towards the Pound Sterling, with the currency trading at 1.6166. Initially factoring in a rate rise, the market was subdued by the announcement that the Bank of England had voted in favour for a neutral policy for the period. Leaving rates at current levels led to a selloff in the currency, as traders looked towards higher yielding risk pairs. Uneventful session for the Euro on Wednesday with the currency opening slightly lower before finding support at 1.4245. Greek debt concerns continue to cause uneasiness in the region, with the markets concerned that Portugal could also have similar problems. With the ECB meeting coming up relatively soon, economists will look for direction and further action to stem the debt problems in the region