After closing flat yesterday, US indices are heading for a slightly higher open. While companies that reported earnings last night and this morning such as Apple could see action today, for the most part, indices appear to be on hold awaiting tomorrow’s FOMC decision. The central bank is not expected to make any changes this time around due to the recent budget crisis. Any hints, however, of when they intend to start tapering, particularly if any sooner than the current street expectation of March, could move stock and currency markets. In FX today, USD has been rebounding a bit along with CAD. The loonie’s gain appears particularly interesting in light of deflation in producer prices. If this starts to drag down consumer prices, the Bank of Canada may need to cut interest rates at some point. The greenback’s rebound may be due to a feeling that with consensus (including me) and market pricing looking to a March or later taper, the risk now is of an earlier taper, the opposite of last month’s meeting where the street expected an early taper and ended up with a delay. The rebound in USD has knocked other currencies back a bit. Gold, while lower on the day, remains above yesterday’s breakout point. The correction in GBP, meanwhile continues to deepen with AUD and NZD also still in correction mode. Today there is a bit of a lull in news outside of earnings reports but things pick up again tomorrow with the FOMC decision and Facebook earnings. Corporate News Apple $8.26 vs street $7.92, Revenues $37.4B vs street $36.8B. Sales guidance $55-$58B vs street $55.4B Nokia Loss (€91 million) vs street (€171 million), revenues €5.6B vs street €5.8B Thomson Reuters $0.48 vs street $0.43 Occidental Petroleum $1.97 vs street $1.90 Pfizer $0.58 vs street $0.56 Cummins $1.94 vs street $2.11 Economic News Significant economic announcements released yesterday afternoon and overnight include: US retail sales (0.1%) vs street 0.0% US producer prices 0.3% vs street 0.6% vs previous 1.4% Canada industrial prices (0.3%) vs street (0.1%) Canada raw material prices (1.5%) vs street (0.5%) Japan unemployment rate 4.0% as expected Japan retail sales 3.1% vs street 1.8% India interest rate decision 0.25% increase to 7.75% as expected Spain retail sales 2.2% vs previous (4.2%) UK mortgage approvals 66K as expected Hungary interest rate decision street 0.2% decrease to 3.40% Economic reports due later today include: 10:00 am EDT US consumer confidence street 75.0


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