Euro Area Jobless Rate Lower Than Expected

The seasonally-adjusted unemployment rate for the 17-nation euro area in December 2013 was reported at 12 percent by Eurostat, the statistical office of the European Union, on Friday.

In the 28-member European Union, or EU, the unemployment rate was 10.7 percent in December 2013, down from the 10.8 percent rate seen in November, and also in December 2012.While the latest unemployment number is slightly higher than the 11.9 percent seen in December 2012, the data showed unemployment in the region has stabilized since October 2013. A Bloomberg poll had pegged the December 2013 unemployment rate at 12.1 percent.

According to Eurostat estimates, 26.2 million people in the EU, of which 19.01 million were in the euro area, were without a job in December. But, the month saw 162,000 fewer people in the EU and 129,000 fewer people in the euro area go without a job, compared to the previous month. Compared with December 2012, unemployment had decreased by 173,000 in the EU, but increased by 130,000 in the euro area, according to Eurostat.

The lowest unemployment rates were recorded in Austria (4.9 percent), Germany (5.1 percent) and Luxembourg (6.2 percent), while the highest rates were seen in Greece (27.8 percent in October 2013) and Spain (25.8 percent).

In comparison, the Eurostat statement noted, the unemployment rate in the U.S. in December 2013 stood at 6.7 percent, down from 7 percent in November 2013 and from 7.9 percent in December 2012.

Meanwhile, annual inflation in the euro area in January fell to 0.7 percent from 0.8 percent in the previous month, a flash estimate from Eurostat showed Friday. It was at 2 percent in January 2013.

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The Fed goes ahead with its tapering plan

Equity markets and asset classes correlated to positive risk appetite were in retreat mode yesterday, with interest rate hikes from the Central Bank of Turkey and the South African Reserve Bank leaving markets skeptical this would be enough to quell the outflows of capital in the respective economies, and left financial markets jittery on the growth outlook for emerging markets.  Adding fuel to the fire, theFederal Reserve decided to trudge ahead with their tapering schedule, choosing to lop off another $10bn of their monthly asset purchases.  While the markets had been expecting another decrease in the size of the Fed’s monthly buying spree, the verdict of continuing with the QE unwind has demonstrated that the escalating unrest in emerging markets and a single soft jobs report are not enough to cause the Fed to delay their tapering schedule, essentially setting a de-facto bar on what the Fed’s threshold for inaction is.

The FOMC also remained upbeat on the state of the US economy, not deviating too materially from the December statement, highlighting that while labour market indicators were mixed, on balance they showed improvement.  The Fed also decided not to tamper with its forward guidance, continuing to advise that interest rates would remain low until the jobless rate fell well past the 6.5% threshold.  After the dust settled, the S&P finished its session down by another 1.02% (essentially a 50/50 split between EM and Fed taper ramifications), while the DXY initially rose, but finished the day slightly lower in the mid-80s.  The Loonie, along with its commodity currency brethren, was dragged lower on emerging market woes, with the CAD selling picking up steam on the heels of the Fed’s taper continuation;USDCAD trotted higher throughout the afternoon, finishing the North American session within striking distance of the 1.12 handle.

The catalysts for yesterday’s sell-off had enough juice to send Asian equity indices lower during their session, with the Nikkei getting clipped for 2.45% while the Shanghai Comp fell by 0.82%.  Despite the sell-off in Asia, emerging market currencies are displaying a sense of stability this morning after the Russian central bank talked up the Rouble in hopes the verbal intervention would act as a tourniquet for the domestic currency’s bleeding.  Some of the upward pressure on USDRUB has abated as the pair trades in the low-35s, which had helped other EM currencies stabilize this morning.

Turning our attention to Europe, the EUR is trading with a decisive offer tone, falling against the USD after softer than expected inflation in Germany trumped a bright employment report for the region.  The number of people out of work in Germany over the month of January declined by 28k, more than the 5k analysts had originally expected, and marked the second consecutive positive employment report.  While the German Central Bank expects the region’s economy to expand at a strong pace in the coming months, prices still remain soft, and have yet to echo the firmness expected in the labour market and GDP – signaling there could be some excess slack that still needs to be absorbed.  The preliminary reading on CPI dropped by 0.6% in January, giving back more than the previous month’s gains, as well as coming in with a faster decline than the 0.4% decline that had been forecast.  The y/o/y inflation reading also fell more than expected, printing at 1.3% and leading to speculation tomorrow’s flash estimate of Eurozone CPI could come on the south side of analysts’ forecasts, which would then raise the prospects of further easing (or some form of non-conventional monetary policy) from the ECB down the road.  The EURUSD has fallen into the high-1.35s before the US GDP figures hit the wires, boosting the DXY to challenge the 81 handle.  The 1.35 level will be key support for the EURUSD pair over the next few sessions, with a break of this level opening up further weakness for a fall into the 1.33-134 region.  From the actions and commentary we’ve heard from Draghi recently, it is likely inflation will have to take another leg lower to prompt action from the European Central Bank, which therefore gives tomorrow’s CPI reading further prominence considering the heightened worries of disinflation in the zone.

As we get set for the North American open, the first reading on Q4 GDP for the American economy was just released.  Expectations had been to see a slight slowing in real economic growth from the third quarter, as the build in inventories that lead to a stronger than anticipated Q3 were drawn down and acted as a drag heading into the end of 2013; the median analyst estimate was for 3.2% growth on an annualized basis, down from the 4.1% that was registered in Q4.  The first estimate of fourth quarter GDP came out right in-line with estimates at 3.2%, with a strong showing from consumers as personal consumption increased 3.3% over the quarter, up from the 2.0% seen in Q3.  Government outlays acted as a drag on the initial GDP estimate, down 12.6% from the previous quarter, while exports increased by a large margin to help offset some of the decreased economic activity on the part of the government.

S&P futures are mildly higher heading into the opening bell, taking some solace in the fact US GDP came out in-line with estimates.  The Loonie was little changed after the release, with USDCAD remaining just south of the 1.12 region.  The commodity complex is mixed before the North American open, with Gold shedding 1.28% to trade south of $1,250/ounce, while WTI closes in on $98/barrel by adding 0.48% this morning.

Looking ahead to tomorrow, there are a few interesting data points on the North American docket to be mindful of for Loonie traders.  First, Canadian GDP for the month of November is due to be released, with expectations we see a 0.2% increase from October, slightly slower than the 0.3% witnessed previously.  Anything coming in around market consensus is unlikely to change the overall bearish sentiment towards the Canadian dollar, as it will likely take a material deviation to the upside from analysts estimates to shake the rising tide in USDCAD, as the market continues to remain focused on the normalization of rates in the US in response to the Fed taper and the impact the compression of yield spreads has on the Loonie.  A slightly stronger than forecast print could cause a knee-jerk reaction lower in USDCAD, but again we would recommend buying the dip on any CAD strength.

South of the 49th parallel, the Personal Consumption Expenditure index will also be released; which is notable considering it is the Fed’s preferred method of measuring inflation in the economy.  With continued assurances from the Fed that interest rates will stay low well past the time unemployment hits 6.5%, the inflation aspect of the Fed’s forward guidance gets more and more important in terms of gauging when the Fed will first start to look at tightening overnight rates.  While inflation in terms of CPI and PCE have both remained sluggish, watch for any meaningful upticks to really stoke the long-USD trade, as the current expectation is for QE to be wound up by the end of 2014 even if inflation remains close to the lower-bound of the Fed’s target.

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Japan Inflation Quickens As Abe Seeks Wage Hikes

Inflation in Japan picked up speed in December, placing pressure on Prime Minister Shinzo Abe's government to encourage wage gains as he attempts to free the nation from the deflationary debility that has lasted 15 years.

According to other data, 103 jobs were available for every 100 person hunting for employment, thus revealing a tightening in the labor market that might put pressure on companies to raise salaries.Prices excluding those of fresh food climbed 1.3 percent from a year before, said Japan's statistics bureau.

Tokyo Metro Co., Coca-Cola (Japan) Co. and other companies have announced price increases, so the challenge for Japanese policymakers is to encourage wage increases while maintaining an exit from deflation after an April rise in the country's sales tax that's predicted to spur contraction.

Many economists believe the Bank of Japan will expand presently prominent easing in the first half of 2014, Bloomberg reported.

“Consumers will be hit in the pocket from rising prices and the upcoming sales-tax hike,” Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo, said. “The onus is now on companies to convert their profits into wage increases and capital spending.”

As for Japanese manufacturing activity, the Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 56.6 in January, from 55.2 in the previous month.

It was the fastest pace that Japanese manufacturing activity has grown in almost eight years, as new orders expanded at a record rate -- and it was a sign of muscular domestic demand prior to an increase in the sales tax in April.

For the 11th consecutive month, the index stayed higher than the 50 threshold separating expansion from contraction, and it reached the loftiest level since February 2006.

"Evidence from panelists suggested that the upcoming rise in the sales tax was a key factor driving the recent expansion, as customers order early to avoid the higher tariff," Claudia Tillbrooke, economist at Markit, noted.

"However, the continued expansion of employment, suggests a degree of confidence in the longevity of the current upturn."

The PMI index's output component climbed to 61.1 from 58.3 in the prior month to reach the highest spot since it was created back in October 2001.

The index for new export orders fell to 52.8 in January from 55.7 in the previous month.

In April, Prime Minister Shinzo Abe's government will raise the 5 percent sales tax to 8 percent in order to pay for climbing welfare costs, according to Reuters.

Sales of apartments, houses, cars and durable goods have been increasing since mid-2013 as the Japanese pubilc eyes relatively expensive items before the tax increase.

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Dollar gains on robust U.S. growth data

The greenback firmed against most major currencies on Thursday after the U.S. reported its economy grew at a healthy pace in the fourth quarter of last year.

In U.S. trading on Thursday,EUR/USD was down 0.85% at 1.3547.

The dollar rallied after the Commerce Department said gross domestic product expanded 3.2% in the three months to December, in line with most forecasts, even outpacing some, following a 4.1% rise in the third quarter.

Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010, which markets applauded especially, while exports grew by 11.4%.

The data strengthened the dollar by cementing market expectations for the Federal Reserve to continue trimming its monthly bond-buying program, which weakens the greenback pushing down long-term interest rates.

On Wednesday, the Fed said it was cutting the program to USD65 billion from USD75 billion. The program launched in late 2012 at USD85 billion in monthly purchases of Treasury and mortgage debt.

Elsewhere on Thursday, the Labor Department said the number of individuals filing for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week’s revised total of 329,000.

Analysts were expecting the figure to remain relatively unchanged at 330,000, though investors shrugged off the data.

Separately, the National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain, which also failed to dampen spirits.

Rough winter weather has taken its toll on recent economic indicators, though general market attitudes persist that U.S. recovery remains on track.

Rising stock prices in the U.S., Europe and elsewhere also bolstered the dollar as fears emerging-market contagion may spread cooled somewhat.

Meanwhile in Europe, Germany's consumer price index slowed to 1.3% in January from 1.4% in December, missing expectations for an uptick to 1.5%.

German inflation fell 0.6% in January from a month earlier. Market expectations were for a decline of 0.4%.

Also on Thursday, data showed that the number of unemployed people in Germany fell by 28,000 in December, outstripping expectations for a decline of 5,000. The German unemployment rate was unchanged at 6.8%.

A separate report showed that Spain’s recovery picked up in the fourth quarter, with gross domestic product expanding by 0.3%, up from 0.1% in the three months to September.

The dollar was up against the yen, with USD/JPY up 0.48% at 102.76, and up against the Swiss franc, with USD/CHF up 1.02% at 0.9036.

The greenback was up against the pound, with GBP/USD down 0.54% at 1.6475.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 1.1173, AUD/USD up 0.52% at 0.8786 and NZD/USD down 0.77% at 0.8151.

The Reserve Bank of New Zealand left the cash rate unchanged at a record low of 2.5%, but said the country’s "economic expansion has considerable momentum" and added that a return of interest rates to more normal levels can be expected "soon."

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.73% at 81.21.

On Friday, the U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.

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Forex - Emerging market currency selloff deepens after Fed

The selloff in emerging market currencies showed no signs of easing on Thursday, after the Federal Reserve announced further cuts to stimulus, while a slowdown in Chinese factory activity also heightened risk aversion.

Emerging economies such as Turkey and South Africa rely heavily on foreign investor flows to fund their current account shortfalls, making them particularly vulnerable to a reduction in global liquidity as the Fed scales back stimulus.Unease over emerging economies intensified after the Federal Reserve rolled back its bond purchasing program by another $10 billion to $65 billion-per-month at its policy meeting on Wednesday.

Risk aversion was also fuelled by renewed concerns over a slowdown in China after revised data on Thursday showed that China’s HSBC manufacturing index ticked down to a six-month low of 49.5 this month, below the preliminary estimate for 49.6.

The Turkish lira was down more than 1% against the dollar, having lost all of the gains created by Tuesday’s night’s massive interest rates hikes.

USD/TRY hit session highs of 2.3012 and was last up 1.41% to 2.2925. The pair fell to lows of 2.1637 on Wednesday.

Turkey’s central bank raised its overnight lending rate to 12% from 7.75% on Tuesday night. The bank also raised its one-week repo rate and its overnight borrowing rate in a bid to stave off inflation and shore up the lira.

The South African rand weakened to more than five-year lows against the dollar, one day after its central bank took markets by surprise with a rise in borrowing costs.

USD/ZAR hit session highs of 11.3907, and was last up 0.24% to 11.3445.

The South African Reserve Bank raised its benchmark interest rate to 5.5% up from 5.0% on Wednesday, the first rate hike since June 2008.

The central bank said a sustained depreciation of the rand will "significantly" raise the risk to the inflation outlook.

Meanwhile, the Hungarian forint fell to two year lows against the euro, with EUR/HUF advancing 0.98% to 312.210.

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Taper 2: Fed announces $10 billion taper – USD advances

The FOMC announced a second taper of another $10 billion as expected, with $5 billion coming down from treasuries and $5 billion from MBS. Despite the weak Non-Farm Payrolls, the US economy seems to be on track, continuing its slow and steady recovery. The rout in emerging markets was not expected to move the members of the FOMC. This is Ben Bernanke’s last rate decision, as he steps down on January 31st and hands the baton to Janet Yellen. Changes in the statement, especially the forward guidance and the state of the economy  are closely watched by the markets, and they are marginally more positive.

The US dollar was somewhat lower towards the announcement, with EUR/USD trading around 1.3670, GBP/USD around 1.6580 and USD/JPY just above 102. After the release, the USD is slightly stronger.

Statement

The forward guidance is quite unchanged. The outlook for the economy is slightly better with the job market now seen as “showed further improvement”, rather than mixed. The economy has picked up in recent quarters, according to the announcement.

Forward guidance was adjusted in December. The Fed still says that “current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent”.

Here is the first paragraphs from the announcement:

growth in economic activity picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate declined but remains elevated. Household spending and business fixed investment advanced more quickly in recent months, while the recovery in the housing sector slowed somewhat. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable

For the first time in a long time, the Fed voted unanimously on the move: no dovish dissenters nor hawkish ones.

Market reaction

• EUR/USD dropped from 1.3670 to 1.3640,. Another big tests awaits the pair: see how to trade the US GDP release with EURUSD.
• GBP/USD is sliding down from 1.6580 to 1.6550.
• USD/JPY is quite stable at 102.08.
• AUD/USD is down 30 pips from 0.8770 to 0.8740.
• USD/CAD is up from 1.1140 to 1.1150.
• NZD/USD is down from 0.8275 to 0.8245.

Background

The Fed made the historic change in policy on December 18th by announcing QE tapering of $10 billion. The prospects were for a total end of QE by the end of 2014.

According to purchasing managers’ indices, retail sales and various other measures, the recovery in the US continues at a steady pace, and is getting ready to walk on its own. The only thing that could have slowed it down was the Non-Farm Payrolls report, that showed a gain of only 74K jobs in December. Nevertheless, this was eventually shrugged off by the markets.

One of the reasons for markets to shrug it off was the music coming from the Fed: various FOMC members seemed to support further tapering. Even a dovish member Narayana Kocherlakota hinted he wouldn’t vote against another taper.

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European stocks open lower after China data, Fed taper; Dax down 0.1%

European stock market were lower after the open on Thursday, after the Federal Reserve announced plans to further taper stimulus and following the release of disappointing Chinese manufacturing data.

During European morning trade, the EURO STOXX 50 fell 0.25%, France’s CAC 40 shed 0.15%, while Germany’s DAX 30 declined 0.1%. 

Elsewhere, Spain’s IBEX 35 dipped 0.3% and Italy’s FTSE MIB index inched down 0.1%, while in London, the FTSE 100 edged down 0.25%.

The Fed said Wednesday that it would reduce its monthly bond buying program by USD10 billion to a total of USD65 billion a month, in a widely anticipated decision.

The central bank left unchanged its statement that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the central bank has previously said it would start to consider rate increases.

Data confirming a contraction in China’s manufacturing sector also weighed. China’s final HSBC Purchasing Managers Index released earlier fell to a six-month low of 49.5 in January from a preliminary reading of 49.6 and down from 50.5 in December.

Market players continued to monitor liquidity conditions in emerging markets, such as Turkey and South Africa. Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.

Financial stocks were broadly lower, as French lenders BNP Paribas and Societe Generale fell 1% and 0.9%, while Italy’s Unicredit and Spain’s Banco Santander slumped 1.2% apiece.

Meanwhile, across the Atlantic, U.S. equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.3% increase, S&P 500 futures signaled a 0.3% gain, while the Nasdaq 100 futures indicated a rise of 0.6%.

Nasdaq futures were boosted after Facebook reported better-than-expected quarterly earnings after Wednesday’s closing bell. The stock was up 10% in pre-market trade.

The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales
.

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Forex Trading Signal for 30th January 2014

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.36538

T/P: 1.36738

S/L: 1.36238

 

GBP/USD

Down Trend:

(1) SELL

E/P: 1.65603

T/P: 1.65403

S/L: 1.65903

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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European stocks rally after the open with Turkey in focus; Dax up 1.1%

European stocks opened sharply higher on Wednesday, after Turkey raised its key interest rates, calming fears about emerging markets.

Traders now readied for the outcome of the Federal Reserve’s two-day policy meeting later in the day for news on the fate of the central bank’s bond buying program.

During European morning trade, the EURO STOXX 50 jumped 1%, France’s CAC 40 advanced 1.1%, while Germany’s DAX 30 increased 1.1%. Elsewhere, Spain’s IBEX35 rallied 1.3% and Italy’s FTSE MIB index rose 1.2%.

Appetite for riskier assets improved after Turkey’s central bank announced aggressive rate hikes overnight in an effort to stem the lira’s decline.

Turkey's central bank raised its overnight lending rate to 12% from 7.75% and its repurchase rate to 10% from 4.5% in its first emergency meeting since 2011.

The move eased concerns over emerging markets, following a broad based selloff last Friday, triggered by worries over the impact of reduction in Fed stimulus and concerns over a possible slowdown in China.

Market players prepared for the outcome of the Fed’s policy meeting, amid expectations for a USD10 billion reduction in the central bank’s stimulus program. The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale rose 1.5% and 1.9%, while Germany's Deutsche Bank and Commerzbank jumped 1.4% and 3.1%.

Among peripheral lenders, Spanish banks Banco Santander and BBVA increased 1.7% and 2.1% respectively, while Italy's Intesa Sanpaolo and Unicredit advanced 1.6% and 1.8%.

Elsewhere, in London, FTSE 100 picked up 0.9% as gains in the mining sector boosted the benchmark index.

BHP Billiton and Rio Tinto rose 1.25% and 1.45% respectively, while Glencore Xstrata and Antofagasta climbed 2.1% and 4.5%.

Copper miner Anglo American saw shares rally 5% after well-received earnings and output reports. 

Meanwhile, across the Atlantic, U.S. equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.5% increase, S&P 500 futures signaled a 0.55% gain, while the Nasdaq 100 futures indicated a rise of 0.85%.

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Forex Trading Signal for 29th January 2014

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.36664

T/P: 1.36684

S/L: 1.36364

GBP/USD

Up Trend:

(1) BUY

E/P: 1.65816

T/P: 1.66016

S/L: 1.65516

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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Forex Trading Signal for 28th January 2014

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Down Trend :

 (1) SELL

E/P: 1.36763

T/P: 1.36563

S/L: 1.36963

 

GBP/USD

Up Trend:

(1) BUY

E/P: 1.65525

T/P: 1.65725

S/L: 1.65225

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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European stocks turn mixed; London’s FTSE 100 underperforms

European stocks turned mixed on Monday, as markets stabilized following a broad based selloff in stocks and emerging market currencies on Friday.

During European afternoon trade, the EURO STOXX 50 inched up 0.4%, France’s CAC 40 added 0.2%, while Germany’s DAX 30 dipped 0.1%.

The German research institute Ifo said its business climate index rose to 110.6 in January, above forecasts for a reading of 110.0 and up from 109.5 in December, indicating that businesses in the euro zone’s largest economy had a strong start to the year.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale advanced 1.6% and 1.4% respectively, while Italy's Intesa Sanpaolo climbed 1.2%.

German chemical maker Lanxess surged 8% after naming Merck Finance Chief Matthias Zachert as its new chief executive officer. Merck shares tumbled 10.2% on the news.

Elsewhere, in London, FTSE 100 tumbled 1.2%, as investors reacted to disappointing corporate news.

BG Group shares plummeted 15.5% after the natural gas producer provided weak guidance for 2013 earnings and said that it has issued force majeure notices under its LNG agreements in Egypt.

Vodafone saw shares fall 5.5% after AT&T said it has no intention of making an offer for the U.K. telecom operator. Separately, The Times reported that Vodafone has approached the private equity owners of Spanish broadband operator ONO about a potential GBP7 billion offer.

Meanwhile, in the U.S., equity markets pointed to a modestly higher open. The Dow Jones Industrial Average futures pointed to a 0.35% increase, S&P 500 futures signaled a 0.35% gain, while the Nasdaq 100 futures indicated a 0.2% rise.

Dow heavyweight Caterpillar saw shares surge 5.9% ahead of the open after reporting better-than-expected fourth quarter earnings and revenue figures.

Investors were looking ahead to the outcome of the Federal Reserve’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.

The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

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