The explosive reaction to yesterday’s FOMC no tapering decision, which came as a surprise to some appears to have quickly run its course. It’s important to remember that tapering speculation had been coming out of the markets since the big downward revision to non-farm payrolls two weeks ago. Yesterday’s big yesterday’s action was mainly driven mainly by the last hopefuls throwing in the towel and unwinding tapering on positions. Whenever markets move quickly in either direction they invite some profit-taking from short-term traders. This appears to be the case today with US indices backing and filling while still trading well above their recent breakout points. With the weekend approaching, and stock markets trading at or near all-time highs we could see more profit taking as the day progresses. Energy markets have come under the most pressure today. Crude oil had run up ahead of the Fed news on better than expected inventories then levelled off in later trading. Today finds WTI down 1.0% and Brent down 1.6%. It appears that we could be seeing selling pressure from people who had been caught offside when the Syria political risk trade unravelled taking advantage of the pop as another chance to cut bait and head for the exit. Currency markets have been mixed today. There was some follow through in the morning from the Fed news but into the afternoon, resource dollars like AUD and NZD have been giving back some of their gains although gold and silver, which have also bounced back from depressed levels have been able to hold on since their rebound started later. JPY had a tough day broadly underperforming other majors. GBP has run into some headwinds following a soft UK retail sales report. This so far appears to be a normal correction following the large gains of the last few days. Except for an interest rate decision in India, it’s a quiet day for news across the Asia Pacific region so we may see markets continue to digest the FOMC news. We also may see some positioning ahead of Monday morning’s (Sunday night in North America) Chinese flash PMI with traders looking for more signs of stabilization or recovery. This could impact China sensitive markets including copper, AUD, NZD, S&P/ASX, China A and the Hang Seng. Economic News Highlights of overnight announcements include: US jobless claims 309K vs street 330K, still impacted by backlog from computer problems in California and Nevada US Philadelphia Fed 22.3 vs street 10.3 US existing home sales 5.48M vs street 5.25M US leading index 0.7% vs street 0.6% US natural gas storage 46 BCF vs street 55 BCF UK retail sales 2.1% vs street 3.3% Swiss interest rate 0.00% no change as expected Norway interest rate 1.50% no change as expected South Africa interest rate 5.00% no change as expected Upcoming significant announcements include: 3:30 pm AEST India interest (repurchase) rate 7.25% no change expected 9:30 am BST UK public finances street £5.2B 9:30 am BST UK public sector borrowing street £11.9B 8:30 am EDT Canada consumer prices street 1.1% vs previous 1.3% Fed Governors Kocherlakota, Tarullo, Bullard and George all give speeches Friday with the pre-meeting blackout lifted.