European markets fell again this morning as traders sat concerned about the impact of a key Federal Open Market Committee due tomorrow. Traders will be meticulously dissecting the minutes with a view to finding out whether the recent spell of positive data from the US will encourage officials to begin with the supposed tapering of stimulus measures. Furthermore, with another day thin on economic data, there really isn’t much chance for sentiment to be swayed.
However, perhaps more pragmatic investors would argue that if the markets did receive a confirmation of tapering by US officials then much of this has already been priced in. In fact, some bulls have even pointed out that the selloff could be good in the short-term as it gives bargain hunters an opportunity in the long-term.
Italy is back on the agenda this morning as news reports over a rift in the coalition government troubled investors. Although such reports have not indicated that the rifts are likely to jeopardise their austerity measures, the news is bringing back memories of political uncertainties in the likes of Greece which have resulted in changes to austerity.