Last nights Fed minutes turned out to be somewhat of an anti-climax, given that they didn’t turn out to be anywhere near as hawkish as markets had anticipated in the wake of the statement released after the October meeting, but they did tell us that the decision to end QE was a fairly easy one. The minutes also highlighted a certain degree of anxiety amongst some on the committee about the likelihood of falling well short of the central banks inflation target of 2% and that prices could stay low for “quite some time”. As such investors weren’t any clearer about the potential timing of a rate hike than they were before, but given concerns about an undershoot to the inflation target then you would have to surmise that the likelihood of a rate rise in the near term must remain a long way off. As for today investors will get the opportunity to get further clues as to whether economic performance in Q4 in Europe has the potential to do any more than stagnate, or improve on the GDP numbers we saw in Q3. The November manufacturing flash PMI’s out of Japan and China earlier this morning certainly don’t offer much in the way of encouragement that either country’s economy is firing on all cylinders. Japanese manufacturing PMI came in at 52.1 below market expectations , while China HSBC manufacturing PMI came in at 50, also below market expectations, in the process ensuring that markets in Europe will likely open lower this morning. Later this morning we get the latest France manufacturing and services flash PMI’s for November and there was some evidence of some improvement to the most recent numbers as both sectors started to edge slowly back towards the 50 level, but expectations still remain in contraction territory with manufacturing expected to come in at 48.8 and services PMI at 48.5. German manufacturing and services flash PMI’s are expected tick up ever so slightly to 51.5 and 54.5 respectively, reinforcing a slightly firmer tone for the German economy in Q4 after narrowly avoiding a fall back into recession in Q3. In the UK doubts about the economic recovery here could well dissipate temporarily after a disappointing retail sales number in September saw a decline of 0.3% caused by consumers deferring their spending on winter clothing due to the unseasonably warm weather in that month. It would not be a surprise to see a rebound during October, with expectations of a rise of 0.3% as that deferred spending finally takes place, while the recent drops seen in petrol and food prices could well have seen some additional discretionary spending take place, as consumers find a little extra cash in their pockets, on the back of the lower prices. On the subject of selling prices the latest CBI Trends selling prices index for November is expected to reinforce that narrative with a reading of -5, below Octobers reading of -3. The Rochester by-election isn’t expected to have too great an effect on the pound given how high expectations are about a prospective upset, and UKIP victory. The political trials and tribulations of both major parties are white noise for the markets for the moment, however that will change come January as we head towards next year’s general election and market anxiety kicks in about possible outcomes. Moving on to the US the latest CPI inflation numbers could well reinforce the concerns the FOMC has about falling prices with the latest CPI number for October expected to show an increase of 1.6%, down from 1.7% in September. As far as the labour market is concerned worries about that continue to diminish with the latest weekly jobless claims expected to come in at 284k, down from 290k, the week before. EURUSD – we got a brief spill over to 1.2600 yesterday but the 1.2580 area remains the key resistance preventing a move towards the 1.2800 level. The 1.2400 level remains a key support and obstacle to further declines towards the 1.2355 level and the 1.2040 lows. GBPUSD – the pound is currently trading in a broad range between 1.5735 and 1.5590, with a break either side determining the next move. Below 1.5590 targets 1.5430 while a move through 1.5750 could well see a move towards 1.5880. EURGBP – the 200 day MA at 0.8050 along with trend line resistance from the September highs at 0.8040 are the next key resistance levels. The 0 7980 level should now act as support along with the 0.7940 area. USDJPY – the yen continues to remain weak and choppy with an outside range day on Monday but we still appear to look as if we could move higher. The US dollar still appears to be well supported for its move towards 120.00 on the dips with 115.40/45, the low this week likely to be a key support. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. 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