Daily Market Review - 12/17/2013

The U.S markets rose sharply yesterday backed by Europe 1.6% jump and ahead of the Fed two-day's meeting that continues to dominate the headlines.

Yesterday positive move came after having posted their worst week since August but with Europe exchanges strong gains following a strong expansion in the euro zone business activity accompanied by a strong manufacturing output in the U.S for a fourth straight month in November, Investors didn't stay shy and the markets rose sharply.

At the close of U.S session, the Dow Jones Industrial Average rose 0.82%, the S&P 500 index rose 0.63%, while the Nasdaq Composite index rose 0.71%.

The Asian markets seen mixed on Tuesday, despite positive sentiment seen from the U.S. Overnight. It looks as if investor starts to take their money of the table ahead the Federal Reserve meeting that will start later today.

In Tokyo, the Nikkei bounced off previous session's two-week low as traders continued to monitor movements in the currency market as well as macro developments.

Earlier today it was reported that Japan's business confidence improved over the 3 months period to its highest level in six years, suggesting Prime Minister Shinzo Abe's stimulus policies are gaining broader traction across the economy.

Elsewhere, in Australia, the ASX/200 Index ended lower after minutes of the Reserve Bank of Australia's December policy meeting showed that the central bank was determined to keep rates steady to gauge the effect of previous cuts.

The U.K and the Euro zone is to announce their inflation data later in the day but despite this strong impact data, all eyes will closely watch the FED 2 days meeting that will start today.

Investors are now un-decisive over when the Fed will start to reduce its $85 billion-a-month bond-buying program.

The surprisingly strong retail sales, consumer sentiment, employment and other indicators had many betting the U.S. central bank will announce plans to trim its asset-purchasing plan then or shortly afterwards.

"Although we have heavier odds pinned on the tapering being announced in January, we think the economic case has already been made for pulling the trigger," analysts at Societe General wrote in a note.

GOLD

Prices seen bouncing from previous lows yesterday but gives back some of the overnight gains as investors trade nervously ahead of the Federal Reserve meeting set to give further guidance on the timing of plans to taper its USD85 billion in monthly asset purchases.

Gold prices have seen falling in recent sessions on expectations for the Fed to taper on Dec. 18 but, If he will postpone his action we might see a short term rally in the gold price.

When it comes to Gold, good economic numbers like the one we saw in the past 1-2 month are bad numbers for gold. The FED might start to trim its asset purchasing program tomorrow or in January but everyone agrees that the FED easy money policy is about to end.

Support: 1220, 1212, 1181

Resistance: 1256, 1292, 1326