Wednesday preview: FOMC, Turkish central bank in focus

28th Jan 2014 15:37

The US Federal Reserve will take centre stage on Wednesday when it wraps up its policy meeting and announces another possible round of stimulus tapering.In December the central bank began to trim monthly asset purchases by $10bn to $75bn. Many analysts expect the Federal Open Market Committee (FOMC) will introduce a further $10bn cut after tomorrow's meeting."The recent market turbulence has fuelled some speculation that the FOMC will hold back from announcing a further reduction in its monthly asset purchases today," Capital Economics said. "However, we expect the US central bank to trim its purchases by another $10bn [...]."The analysts said they believe the Fed will be keen to show "continuity and stability" in its policy making and doubts the central bank will be swayed by the recent short-term market volatility in its decisions over the medium term", expecting the authorities in the emerging countries concerned to take their own policy decisions to forestall possible risks. "This is already happening: India's central bank unexpectedly raised its repo rate on Tuesday and Turkey's central bank is likely to have tightened monetary policy overnight."All but one of 31 economists polled by Reuters on Monday night said they expect Turkey's monetary authority to increase its overnight interest rate when it meets tonight. The media expectation is for a 225 basis point hike, from 7.75% at present. In other macro-related news tomorrow, GfK's consumer confidence survey for Germany will be released along with US mortgage applications for the week to January 24th.On the company front, Antofagasta will unveil its fourth quarter production report. Numis has forecast production of 168,000 tonnes of copper and 60,000 ounces of gold at a net cost of $1.44 per pound, slightly down quarter-on-quarter.Full-year output is also tipped to drop year-on-year to 707,000 tonnes of copper and 290,000 ounces of gold. However, it would be ahead of the guidance of 700,000 tonnes of copper and 280,000 ounces of gold."We expect Los Pelambres and Esperanza to be down slightly on grade but better on tonnage," the broker said. "We expect Antucoya to remain on time and budget and look for a steer on the Los Pelambres expansion, with PFS results expected. We expect FY14 guidance to be at similar levels of 690-700kt."For their part, analysts at Credit Suisse saw "potential for a positive surprise on cost reduction targets." They expected gross cash costs to be called down by 5% for 2014 - to 178c - versus guidance of 185c for 2013, due to a weaker currency and 3-4% 'real' cost reductions. A 7 cent move in costs equates at the moment to a 5% impact on operating profits at the EBITDA level, they go on to explain.Wednesday January 29thINTERIM EX-DIVIDEND DATEAnite, Conviviality Retail , CVC Credit Partners European Opportunities Ltd EURO, CVC Credit Partners European Opportunities Ltd GBP, NB Private Equity Partners Ltd., Pennon Group, Puma High Income VCT , Puma Vct 8, Puma Vct VIIQUARTERLY EX-DIVIDEND DATEMerchants TrustINTERNATIONAL ECONOMIC ANNOUNCEMENTSCrude Oil Inventories (US) (15:30)FOMC Interest Rate announcement (US) (19:00)GFK Consumer Confidence (GER) (07:00)M3 Money Supply (EU) (09:00)MBA Mortgage Applications (US) (12:00)GMSMinoan GroupFINALSStaffline GroupIMSSBritvic, BTG, Antofagasta (production report), Liontrust Asset Management, Anglo American (production report)SPECIAL EX-DIVIDEND PAYMENT DATEAshley (Laura) HoldingEGMSInvestors In Global Real Estate LtdAGMSArtemis VCT, Britvic, Finsbury Growth & Income Trust, Octopus VCT 3, Octopus VCT 4, Renew HoldingsFINAL EX-DIVIDEND DATEFenner, Renew HoldingsUK ECONOMIC ANNOUNCEMENTSNationwide House Price IndexSpeech by Governor Mark Carney (13:15)RD