A single word can mean a lot. Two changes in the US Fed’s monthly meeting statement have convinced markets the tightening timetable is more benign. Against a backdrop of an improving European outlook and strong US company earnings the statement saw new record highs for major share indices, lower interest rates for bonds, a weaker USD and soaring EUR, and increased demand for gold.

The withdrawal of $4.5 trillion in stimulus funds is now expected “relatively soon” rather than “this year”, and inflation has now “declined” rather than being “somewhat lower”. These subtle changes sparked a positive if muted reaction. Markets remain calm. A reminder that the Fed’s timetable is data dependent has some analysts suggesting that a Congressional failure to raise the debt ceiling before September could disrupt bond markets and the Fed’s plans.

194 of the S&P 500 companies have reported so far. More than three-quarters beat forecasts, adding to positive momentum.

Copper and oil rallied overnight. This ongoing lift in industrial commodities aids investor sentiment and should see small opening gains across the Asia Pacific region today. However outperformance by the region yesterday could mean most of the positives are already priced in. Australian investors may show caution on further gains for the AUD, which once again crested 80 US cents and 89 Japanese yen.