OVERNIGHT MARKETS ROUND UP – 30/10/13

European bourses opened positively today and continued to push all-time highs as investors betted that the FOMC will reaffirm their commitment to its $85 billion monthly bond purchasing amidst a series of data which has indicated that the US economy is still stumbling.  For example, monthly pending home sales figures as well as consumer confidence figures released this week have both fallen below expectations.  In addition, investors are also concerned that the recent government shutdown has negatively affected the economy. 

Thus, since officials have repeatedly announced that economic fundamentals need to be strong before tapering is considered, it seems that the general consensus in the market is that quantitative easing will continue for now. 

However, there are always the contrarians out there who have pointed out that lately the Fed has been moving away from its predictable stance and have even been going against market expectations.  One only has to go back to September when the markets were generally expecting tapering to happen, although in the end officials announced that they were continuing with their bond purchasing.  Clearly despite the general consensus, investors should at least brace for the possibility that the majority could once again be wrong.