1. There might be some more action late night tonight as FOMC minutes tonight are likely to confirm that the Fed is on track for a December hike, although with the market pricing this in with around a 70% chance, it may not change expectations much. However, the minutes may reveal more about how the Fed’s balance between a stronger economy and still too low inflation is viewed.
2. The EURUSD gained after Catalonian President Carles Puigdement last night refrained from making a formal declaration of independence. Puigdement called for more dialogue with Spain while maintaining that the result of the referendum on 1 October had given his government a mandate to pursue independence but that he would hold off for ‘a few weeks’ while negotiations take place. EURUSD rose to 1.1840 from 1.1745.
3. Overnight, Asian equities continue their uptrend with several indices nearing multi-year or even all-time record levels (Kospi). The dollar stabilizes after recent setback, but without an indication of a real comeback. USD/JPY is little changed at 112.30. The AUD initially profited from a record bond auction and strong consumer confidence, but the gains evaporated. AUDUSD trades at 0.778
4. The pound was almost flat, with GBP/USD at 1.3198. Sterling rose 0.5% on Tuesday after stronger-than-expected British industry data underlined expectations that the Bank of England will raise interest rates next month.
5. Gold prices were lower on Wednesday at $1289 an ounce as investors awaited the minutes of the Federal Reserve’s September policy meeting later in the day, which were expected to reinforce expectations for a December rate hike. Expectations that the Fed will raise interest rates in December pressured prices lower. At its September meeting the Fed indicated that it intends to raise rates once more this year and three times in 2018.