As expected, the release of the FOMC minutes sparked volatility in the currency markets with the US Dollar whipsawing about as traders digested the report. Once the dust had settled a bit, the greenback and US yields edged higher as the market accepted the members assertion that they were "broadly comfortable" with Bernanke's view of curtailing the stimulus program in the next few months if the economy improves. The debate, by and large, centered on the timing of the process with a few saying that tapering might be needed soon.
Given that the risk of a September taper still appears to be intact, the reduction in stimulus should, at least in theory, be bullish for the dollar and US yields and bearish for the stock market and Gold. The market's focus will now be on the September 6 US Non-farm Payrolls report as this will provide the most recent snapshot of the economy before the September 18 FOMC meeting. A strong report there would likely cement the view that tapering is imminent.
Australia's Conference Board Leading Index for June fell to -0.2% -vs- last month's reading of 0. China's HSBC Flash PMI for August jumped to 50.1 which was higher than both estimates of 48.2 and last month's reading of 47.7 and seems to indicate that the world's second largest economy is stabilizing. Due out a bit later on will be the Euro zone PMI's.