Well the August minutes out of the FOMC’s last night told us very little that we did not already know.

In short the Fed will continue to reinvest the repayments from the $1.4 trillion of mortgage debt that it has already bought and will plough it back into US government bonds. In addition, it has maintained its commitment to keep Interest rates at a touch above zero for an extended period of time. The overall effect on the equity markets was minimal with the Dow finishing up 5 points yesterday in the end after a moderate sell off when the minutes were released.

The dollar had a mixed day on the forex markets with it showing some good strength against Sterling pushing cable back down below the 1.5325 level last night only to see it bounce 100 ticks in early morning trading. Against the Euro it weakened slightly with the single currency nudging up to 1.2690 but the dollar continued its slide against the Yen with it trading as low as 83.82 before having a modest recovery this morning and is back up to 84.20.

Oil finally managed to break its link to the equity yesterday and continued its slide as concerns over the global economy and hence demand weighted on traders’ minds with WTI falling $2.50 down to 71.50 per barrel. Gold on the other hand continued its march north gaining over $10 with the spot price trading above $1250 and now with the $1262 level coming ever closer a test of these highs seems almost inevitable.

The main data release today comes out of the states with the ADP Employment Change which shows the change in private sector employment levels. As it is this sector rather than the government sector that Obama is relying on to drive the economic recovery, any number below the survey estimate of +17K could spook the equity markets and further weaken the dollar with the Non Farm Payroll number just around the corner on Friday.

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