Global Markets Overview – November 13, 2014

The United States Federal Reserve Board building is shown in Washington October 28, 2014. The U.S. Federal Reserve this week will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets that saw some measure of inflation expectations drop worryingly low. REUTERS/Gary Cameron (UNITED STATES - Tags: BUSINESS POLITICS)

Equities continued to consolidate with a mild risk-off tone in a fairly quiet session on the economic calendar. The highlight was perhaps comments by Fed member Charles Plosser who reiterated the Fed should begin raising rates soon in order to avoid being far behind the curve. While Mr Plosser is traditionally a hawk, I think the market is gradually moving in that direction and this perhaps weighed on equities. On the other side of the spectrum, Kocherlakota maintained his dovish stance and said he feels 2015 lift off is inappropriate, which seems a little out of touch considering the current dynamics.

Pound declines on inflation report

The sterling came under renewed pressure on the back of a dovish BoE inflation report and a slight downgrade in tone by BoE Governor Mark Carney. From stating rates lift off is likely to arrive sooner than anticipated in the past, Mr Carney suggested markets now expect somewhat easier monetary conditions than what had previously been the case. Overall the quarterly inflation report downgraded UK growth and inflation expectations as weak economic growth in Europe is likely to impact the UK. GBP/USD dropped below last week's low and is now trading at its lowest since September 2013. Key support comes in at $1.5722 which is the 61.8% retracement of the July 2013 to July 2014rise.

Japan to remain in focus

Japan will remain in focus in today's Asian trade despite the rumours that have been making the rounds this week being shot down. While cold water has been poured on talk of an election and a delay to the sales tax hike, it seems the market is not completely convinced this is off the table. USD/JPY has held its ground near 116.00 and I feel this would have unwound significantly if the market felt this was off the table. We are calling the Nikkei up 0.2% today and I'm sure there'll be some volatility there as the day progresses.

Change of guard at Westpac

Ahead of the open we are calling the ASX 200 relatively flat at 5464; even after yesterday's carnage, I'm still struggling to see what could support this market.

The big news today is the fact that Westpac CEO Gail Kelly is to step down effective February 1 and will be replaced by Brian Hartzer. While it is always disappointing to see a leader who's done very well leave, the fact a succession plan is already in place and the prospect of fresh ideas from an accomplished successor is likely to calm shareholders.

The materials space is likely to remain under pressure and I suspect investors will be looking to use strength as an opportunity to sell as confidence wanes. On the data front we have MI inflation expectations and RBA Assistant Governor Kent speaks at an Australian Business Economists event.

Elsewhere in the region we have China's industrial production, fixed asset investment and retail sales. These readings will have some bearing on AUD/USD which has been resilient so far this week. Any disappointment in data could result in some profit taking.

Asian markets opening call	Price at 8:00am AEDT	Change from the Offical market close	Percentage Change
Australia 200 cash (ASX 200)	5,464.30	1	0.02%
Japan 225 (Nikkei)	17,237.20	40	0.23%
Hong Kong HS 50 cash (Hang Seng)	23,846.60	-92	-0.38%
China H-shares cash	10,701.90	-28	-0.26%
Singapore Blue Chip cash (MSCI Singapore)	370.00	-0	-0.02%
US and Europe Market Calls	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
WALL STREET (cash) (Dow)	17,608.50	19	0.11%
US 500 (cash) (S&P)	2,037.58	1	0.04%
UK FTSE (cash)	6,604.70	-15	-0.23%
German DAX (cash)	9,222.00	-126	-1.35%
Futures Markets	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
Dow Jones Futures (December)	17,565.50	20.00	0.11%
S&P Futures (December)	2,034.38	0.75	0.04%
ASX SPI Futures (December)	5,478.50	-5.00	-0.10%
NKY 225 Futures (December)	17,277.50	-100.00	-0.58%
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT)	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
AUD/USD	$0.8714	0.0038	0.44%
USD/JPY	¥115.525	-0.090	-0.08%
Rio Tinto Plc (London)	£30.28	0.41	1.39%
BHP Billiton Plc (London)	£16.50	-0.05	-0.30%
BHP Billiton Ltd. ADR (US) (AUD)	$33.23	0.03	0.10%
Gold (spot)	$1,159.71	-5.69	-0.49%
Brent Crude (December)	$79.97	-1.19	-1.46%
Aluminium (London)	2059.75	15.00	0.73%
Copper (London)	6678.75	-10.25	-0.15%
Nickel (London)	15567	112.00	0.72%
Zinc (London)	2279	7.00	0.31%
Iron Ore (62%Fe)	75.4	-0.10	-0.13%