Last night’s FOMC minutes didn’t really shed any fresh light on whether the Fed would be more or less inclined to start a tapering program at next months Fed meeting, but they did show that “almost all” policymakers were broadly comfortable with the time line laid out by Fed Chairman Bernanke of an end to the program by the middle of next year, and that “almost all” were comfortable with the idea that it should start later this year. It is this part of the minutes that bond markets and equity markets appear to have reacted to last night, as both finished lower, and are likely to see European markets open lower this morning, even though we got nothing in the way of clues as to a timetable or the amount of a possible taper. The uncertainty continues to remain as to the timing of any such a program. Given the conflicted nature of the debate that last nights minutes gave, it would seem premature at best to suggest a tapering program could be given the green light to start in September. It would therefore seem safe to conclude that the economic data between now and that meeting on September 17th and 18th will dictate not only the timing, but also the initial amount, whether it be $10bn or $20bn. With the health of the jobs market at the forefront of the Feds thinking it therefore seems safe to assume, if you can assume anything in these markets, that the August payrolls report and the ISM will be key factors in any decision with respect to these two factors. Now that the minutes are out of the way we can get back to the more predictable past time of looking at economic data and China’s HSBC manufacturing PMI data out early this morning continue to point to an economy that could be starting to find a bit of traction after a jump in the PMI reading from 47.7 to 50.1. Expectations were for a reading of 48.3, and the better number does appear to suggest that the recent tax cuts for small businesses may be starting to have an effect. Moving onto Europe and the European growth story returns to the forefront of investor’s minds after last week’s better than expected French and German GDP numbers. These surprisingly strong numbers have raised expectations about how good or otherwise the latest August manufacturing and services PMI’s will be, as expectations of some form of sustained economic recovery in Europe start to gain some traction. While Germany’s GDP numbers weren’t a surprise, the 0.5% increase in French Q2 GDP was, given how weak both the manufacturing and services PMI data was throughout the second quarter of this year with readings on both measures between 44.1 and 48.5. Markets will be therefore expect to see an improvement to this month’s PMI numbers for confirmation that this GDP read is not a one off. Expectations are for readings of 50.4 for manufacturing and 49.3 for services. Germany’s numbers are expected to come in at 51.1 and 51.7 respectively, with the broader Eurozone measure set to come in at 50.9 for manufacturing and 50.3 for services. Back in the US the latest weekly jobless claims numbers are expected to come in at 329k, slightly up from last week’s 320k. It is this continued improvement that has raised expectations of a September taper in recent weeks. EURUSD – the euro appears to be running out of steam above the 1.3430 area for the moment raising the risk of a pullback towards 1.3310. To delay a move towards the 1.3710 area we need to see a move back below 1.3310. To reopen the downside we need to break below the 1.3150 area and the low four weeks ago at 1.3135 to achieve this. GBPUSD – we got to 1.5715 yesterday with the pound falling short of resistance near the June highs and 200 week MA at 1.5750. This suggests we could well start to head lower back towards the 1.5520 area where we have the 200 day MA, while below that the 1.5410 area also remains important given it is also the low last week. Only a move below the 1.5410 area targets trend line support from the 1.4810 lows at 1.5315, with support also at the 50 and 100 day MA around the 1.5330 area. EURGBP – the pressure remains towards the downside and a test of the trend line support at 0.8505 from the 2012 lows at 0.7705. This marks the key level for the primary uptrend. A break of this trend line targets a return to the May lows at 0.8405. We should now see a barrier around the 0.8580/90 area. USDJPY – while the cloud resistance now at the 98.80 level continues to cap pressure is likely to remain towards the downside. This remains the barrier to a move back to 99.45 trend line resistance from the May highs at 103.75. The triangular consolidation continues to unfold and we could well see a return to the base of the consolidation at the 95.80 trend line from the February lows at 91.05. 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. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.