Flash: Calm before the storm? Markets brace for Fed – Investec

FXstreet.com (New York) - In the midst of a quiet trading day for G7 currencies there was a continuation of the recent sell off in fixed income assets and equities as it appears investors are catching their breath at the end of a relatively volatile summer, with emerging market currencies suffering the brunt of the weakness in the FX world, notes Jonathan Pryor, Corporate Treasurer at Investec.

Key quotes

“Evidence of the sell off was in another decline in the S&P500 yesterday which endured its 9th loss in eleven sessions and it’s notably coming close to giving up half the gains it has made during its rally since early June.”

“It appears it wasn’t only increased speculation of Fed tapering next month that caused the sell-off in equities yesterday ahead of the FOMC minutes tomorrow night but also poor US reporting figures, particularly from banks.”