Markets keenly await the FOMC two-day meeting outcome and the rate decision. The expectation is for a further rate cut, but spikes in inflation may influence the Fed to leave rates, for more clarification. The announcement will be tonight, followed by the Bank of England and the Bank of Japan. US Retail Sales beat expectations and jumped for November, confirming some life in the US consumer, despite difficult economic circumstances. The important German ZEW Economic Sentiment report was unusually positive, jumping up sharply, contrary to the gloom in the German economy. This manifested politically, with the fall of the German Government, following a vote of no confidence. This is shades of what is happening in France, except the Germans must now face an early election. The US Dollar was steady, with the EUR trading around 1.0500, while the GBP holds onto 1.2700.The Chinese Government has budgeted a 4% deficit in the coming year, allowing for a massive fiscal stimulus, boosting the economy both fiscally and monetarily. The commodity currencies remain under pressure, with the AUD trading below 0.6350, while the NZD struggles to hold 0.5750. All eyes are on the Fed, while local markets will be watching the NZ Current Account number, with interest.
