- The European indices are currently trading in positive territory in the session following the Fed’s decision to keep interest rates unchanged, as expected, as well as the accompanying FOMC statement.

- Shares of ING traded up today following a strong earnings report. In the UK shares of Royal Sun Alliance also traded higher following their earnings report, while shares of Smith’s group weighed down on the FTSE following a poor earnings report. Adidas shares opened higher in Germany following their earnings report, while shares of Volkswagen trade lower after being removed from Goldman Sachs’ conviction buy list.

- European government bonds are currently trading lower in the session as equity markets surge following the Fed’s rate decision yesterday. Similarly in the UK gilts are trading lower in the session. Gilts were largely unaffected by the Bank of England’s quarterly inflation report released mid-session.

- As expected, the Swiss unemployment rate for the month of July remained unchanged from June at 2.5%, while the seasonally adjusted unemployment rate remained unchanged at 2.7%. Note that the headline reading of 2.5% maintains unemployment at its lowest level since September of 2002.

- The German trade balance for the month of June, which was expected to rise, declined slightly to €16.5B from €17.5B in May, while the current account rose by more than expected to €16.6B from €8.9B in May. Imports rose by more than expected to 6.7% in June from –3.6% in May, the highest level since August of 2002. Exports also rose by more than expected to 2.1% in June from –0.7% in May.

- The French trade balance for the month of June rose to a deficit of €3.0B in June from a downwardly revised deficit of €3.2B in May.

- In the quarterly inflation report released overnight the Bank of England said that one more rate increase will bring consumer prices to their target level by 2009. The reports said that risks to CPI are slightly to the upside in the medium term, adding that developments in credit markets are a downside risk to growth. The BOE said that GDP growth is seen slowing to 2.5% in two years, and noted that there may be some marked upward revisions to current GDP.

- Following the quarterly inflation report the Bank of England’s King said that the BOE sees greater than usual CPI uncertainty. King noted that tighter credit may slow demand more than initially forecasted, and said that slower demand growth will be needed to keep CPI at the 2.0% level.