Twist Replacement Eyed
Markets were steady despite some geopolitical concerns over the Koreas. Equity markets in Asia were largely flat as investors look ahead to the FOMC decision later today, where a replacement for Operation Twist is expected from the Fed. We look for a new outright asset purchase programme, in long-dated Treasurys, of $40-$45bn per month. In addition Fed Chairman Bernanke will host a press conference where the market will look for more indications of policy evolution. Elsewhere, the Eurozone continues to offer sour notes. Greece’s debt buyback fell €2.6bn of target, and the Eurogroup will need to meet today to decide how to make up for the shortfall, lest the IMF be further antagonised. As for data, UK labour market data and Eurozone industrial production numbers are due today. Overnight EURUSD traded 1.2997~1.3015 and USDJPY 82.49~82.69.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank