Wednesday Morning Cheat Sheet: 3 Stories Moving Markets

The Nikkei fell more than 2 percent in Japan overnight, closing below 10,500 for the first time all year. The Hang Seng was down a tenth of a percent, while the S&P/ASX 200 increased 0.18 percent.

The markets were also mixed in Europe heading into the opening bell in New York. Germany’s DAX and the FTSE 100 increased 0.24 and 0.10 percent, respectively, while the Stoxx 50 was off about 0.13 percent. Gold was effectively flat at $1,693.10, while Brent crude was up slightly to $112.51 per barrel.

Futures in the United States were mixed but relatively flat, with the Nasdaq seeing the most action after Google (NASDAQ:GOOG) and IBM (NYSE:IBM) beat earnings expectations last night.

At 8:30 a.m.: DJIA: +0.02%, S&P 500: -0.13%, NASDAQ: +0.15%.

Here are three stories to keep an eye on today:Yen

1) Already a hot issue, Japan’s yen is expected to weaken further by the end of the year. The Bank of Japan has decided to hold off on its massive stimulus package until 2014, pressuring the government to spur economic growth through fiscal measures.

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Japanese officials reiterate that the country is not involved in competitive devaluation of their currency, but American companies who compete against Japanese imports, such as automakers, have called shenanigans. American car makers saw their market shares decline at the hands of foreign competition last near, and some observers have grown bullish on their growth prospects for 2013… (Read more.)

Debt2) The Republican-led House will vote on a short-term increase to the debt ceiling today. The White House said it is likely to sign a measure if it reaches President Barack Obama’s desk, but the bill has to pass a Democratically-controlled Senate first.

Democrats have expressed some concern about the GOP bill. A short-term solution is not ideal, but letting this opportunity pass could prove devastating. The best outcome for the markets is that with a deal in place, spending cut negotiations proceed unfettered, and a budget is adopted before the short-term borrowing increase expires.

3) The World Economic Forum’s annual meeting continues today, with top political leaders, academics, and business leaders from around the world meeting to evaluate and discuss the global situation. JPMorgan (NYSE:JPM) CEO Jamie Dimon spoke earlier as part of a panel on the limits of monetary policy, the situation in Europe, the real-world effects of Basel III, and shadow banking.

Later today, Christine Lagarde, managing director of the International Monetary Fund, will deliver a speech on the meeting’s theme, resilient dynamism… (Read more.)

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