Thursday 29th April …..FX markets continue to be hostage to developments (or not) between Euro zone finance ministers and the IMF. The news is not good with no decision being made and also the cost of the Greek ‘bailout’ looking set to double. German voters are far from happy and chancellor Merkel will have to tread slowly and carefully for the next few weeks or so. Indecision equals risk aversion and the Euro and global stocks look set to remain under pressure for some time to come.

Today, markets stabilized after German Chancellor Angela Merkel pledged to speed up the process of loan provisions to Greece overnight even though S&P cut Spain’s credit rating by 1 notch to AA with a negative outlook. Sentiments were also helped as Fed kept the “extended period” language and helped US stock closed higher. Asian markets are steady with Japan markets closed while crude oil is mildly up at 83 level. Some consolidations would probably be seen today in the forex markets but Euro is still vulnerable to the downside.

The FOMC made few changes at April’s meeting. While mildly adjusting assessment on economic outlook, especially on housing and employment, the Fed maintained the policy rate at 0-0.25% and reiterated the exceptionally low rate policy will be kept for an extended period. Concerning inflation, the stance was exactly the same as the prior meeting